##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K





|   |  |                                                                                             
|-- |  | --------------------------------------------------------------------------------------------
|þ  |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|   |  | For the fiscal year ended December 31, 2005                                                 
|OR
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|   |  | For the transition period
    from           to                                             

Commission File Number 000-22439





FISHER COMMUNICATIONS, INC.


(Exact name of registrant as specified in its charter)





|                                                                                              |  |                                  
|--------------------------------------------------------------------------------------------- |  | ---------------------------------
|Washington                                                                                    |  | 91-0222175                       
|(State of Incorporation)                                                                      |  | (IRS Employer Identification No.)
|100 4th Avenue N., Suite 510
     Seattle, Washington(Address of principal executive offices) |  | 98109(Zip Code)                  

(206) 404-7000


(Registrants telephone number, including area code)





Securities registered pursuant to Section 12(b) of the
Act:


|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of Each Class |  | Name of Each Exchange on Which Registered
|                    |  |                                          
|None                |  | Not Applicable                           

Securities registered pursuant to Section 12(g) of the
Act:


Common Stock, $1.25 par value


(Title of Class)


o þ


o þ


þ o


S-K 10-K 10-K. o


12b-2


o þ o


12b-2 o þ






|                              |  |                             
|----------------------------- |  | ----------------------------
|Title of Class                |  | Number of Shares Outstanding
|                              |  |                             
|Common Stock, $1.25 Par Value |  | 8,705,041                   

DOCUMENTS INCORPORATED BY REFERENCE


|                                                                                        |  |                              
|--------------------------------------------------------------------------------------- |  | -----------------------------
|Document                                                                                |  | Parts Into Which Incorporated
|                                                                                        |  |                              
|Proxy Statement for the Annual Meeting of
    Shareholders to be held on April 27, 2006 |  | Part III                     









---

TABLE OF CONTENTS



|                                                                                        |                                                                                                                      |                                       |  |  |  |  |  | 
|--------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | ------------------------------------- |  |  |  |  |  | 
|PART I                                                                                 
|                                                                                        | ITEM 1. BUSINESS                                                                                                    
|                                                                                        | ITEM 1A. RISK FACTORS                                                                                               
|                                                                                        | ITEM 1B. UNRESOLVED STAFF COMMENTS                                                                                  
|                                                                                        | ITEM 2. DESCRIPTION OF PROPERTIES                                                                                   
|                                                                                        | ITEM 3. LEGAL PROCEEDINGS                                                                                           
|                                                                                        | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS                                                       
|PART II                                                                                
|                                                                                        | ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|                                                                                        | ITEM 6. SELECTED FINANCIAL DATA.                                                                                    
|                                                                                        | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS                        
|                                                                                        | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS                                                
|                                                                                        | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                 
|                                                                                        | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                        
|                                                                                        | ITEM 9A. CONTROLS AND PROCEDURES                                                                                    
|                                                                                        | ITEM 9B. OTHER INFORMATION                                                                                          
|PART III                                                                               
|                                                                                        | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                                         
|                                                                                        | ITEM 11. EXECUTIVE COMPENSATION                                                                                     
|                                                                                        | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                             
|                                                                                        | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                             
|                                                                                        | ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                     
|PART IV                                                                                
|                                                                                        | ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                                                                 
|Report of Independent Registered Public Accounting Firm                                
|                                                                                        |                                                                                                                      | CONSOLIDATED STATEMENTS OF OPERATIONS
|CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME                                        
|FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|Schedule II                                                                            
|SIGNATURES                                                                             
|EXHIBIT INDEX                                                                          
|EXHIBIT 2.1                                                                            
|EXHIBIT 10.1                                                                           
|EXHIBIT 10.13                                                                          
|EXHIBIT 10.14                                                                          
|EXHIBIT 10.15                                                                          
|EXHIBIT 10.16                                                                          
|EXHIBIT 21.1                                                                           
|EXHIBIT 23.1                                                                           
|EXHIBIT 31.1                                                                           
|EXHIBIT 31.2                                                                           
|EXHIBIT 32.1                                                                           
|EXHIBIT 32.2                                                                           



---



##### Table of Contents






PART I







|        |         
|------- | --------
|ITEM 1. | BUSINESS

10-K




Company Description












1



---



##### Table of Contents







Television Broadcasting




|        |  |             |                     |        |      |  |         |             |  |           |            |  |             |     |      |         |           |  |                    |                       |  |  |    |  |  |  |                   | 
|------- |  | ----------- | ------------------- | ------ | ---- |  | ------- | ----------- |  | --------- | ---------- |  | ----------- | --- | ---- | ------- | --------- |  | ------------------ | --------------------- |  |  | -- |  |  |  | ----------------- | 
|        |  |             |                     |        |      |  |         |             |  | Number of |            |  |             |     |     
|        |  |             |                     |        |      |  |         | Average     |  |           | Commercial |  |             |     |      |        
|        |  |             |                     | DMA(1) |      |  | Network |             |  | Audience  |            |  | Stations in |     |      | Rank in |           |  | Expiration Date of |                      
|Station |  | Market Area |                     |        | Rank |  |         | Affiliation |  |           | Share(2)   |  |             | DMA |      |         | Market(2) |  |                    | Affiliation Agreement | 
|        |  |             |                     |        |      |  |         |             |  |           |            |  |             |     |      |         |           |  |                    |                       | 
|KOMO    |  |             | Seattle-Tacoma, WA  |        |      |  | 13      |             |  |           | ABC        |  |             |     | 10.0 | %       |           |  | 11                 |                       |  |  | 2  |  |  |  | August 31, 2009   | 
|KATU    |  |             | Portland, OR        |        |      |  | 23      |             |  |           | ABC        |  |             |     | 10.0 | %       |           |  | 6                  |                       |  |  | 3  |  |  |  | August 31, 2009   | 
|KVAL    |  |             | Eugene, OR          |        |      |  | 121     |             |  |           | CBS        |  |             |     | 19.0 | %       |           |  | 5                  |                       |  |  | 1  |  |  |  | February 29, 2016 | 
|KCBY    |  |             | Coos Bay, OR        |        |      |  | 121     |             |  |           | CBS        |  |             |     | 19.0 | %       |           |  | 2                  |                       |  |  | 1  |  |  |  | February 29, 2016 | 
|KPIC(3) |  |             | Roseburg, OR        |        |      |  | 121     |             |  |           | CBS        |  |             |     | 19.0 | %       |           |  | 3                  |                       |  |  | 1  |  |  |  | February 29, 2016 | 
|KBCI    |  |             | Boise, ID           |        |      |  | 119     |             |  |           | CBS        |  |             |     | 10.8 | %       |           |  | 6                  |                       |  |  | 2  |  |  |  | February 29, 2016 | 
|KIMA(4) |  |             | Yakima, WA          |        |      |  | 126     |             |  |           | CBS        |  |             |     | 17.0 | %       |           |  | 5                  |                       |  |  | 1  |  |  |  | February 29, 2016 | 
|        |  |             | Pasco/Richland/     |        |      |  |         |             |  |           |            |  |             |     |      |         |           |  |                    |                       |  |  |    |  |  |  |                   | 
|KEPR(4) |  |             | Kennewick, WA       |        |      |  | 126     |             |  |           | CBS        |  |             |     | 10.0 | %       |           |  | 5                  |                       |  |  | 2  |  |  |  | February 29, 2016 | 
|KLEW(5) |  |             | Lewiston, ID Idaho  |        |      |  | NA      |             |  |           | CBS        |  |             |     | NA   |         |           |  | 1                  |                       |  |  | NA |  |  |  | February 29, 2016 | 
|KIDK    |  |             | Falls-Pocatello, ID |        |      |  | 163     |             |  |           | CBS        |  |             |     | 12.0 | %       |           |  | 5                  |                       |  |  | 2  |  |  |  | February 29, 2016 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | DMA represents an exclusive geographic area of counties in which
    the home market stations are estimated to have the largest
    quarter-hour audience share. DMA Rank represents the DMA ranking
    by size of the market area in which our station is located. DMA
    Rank is based on January 2006 estimates published by Nielsen
    Media Research. NA refers to Not Available.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Except for the Eugene, Oregon market, average audience share and
    rank in market are based on Nielsen Media Research data for the
    February, May, July and November 2005 rating periods, Sunday to
    Saturday, 6 a.m. to 2 a.m. With respect to the Eugene,
    Oregon market, average audience share and rank in market are
    based on BIA Financial Network, Inc. data for the February and
    May 2005 rating periods, Sunday to Saturday, 9 a.m. to
    midnight.



|    |                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Fisher Broadcasting owns a 50% interest in South West Oregon
    Television Broadcasting Corporation, licensee of KPIC.                                                                     
|   
|(4) | Station ranking is for two-station group designated as KIMA+ by
    Nielsen Media Research.                                                                                                 
|   
|(5) | Although included as part of the Spokane, Washington DMA, KLEW
    primarily serves the Lewiston, Idaho, Clarkston, Washington
    audience that is only a small portion of the Spokane DMA.



Television Markets and Stations


KOMO TV, Seattle-Tacoma, Washington


Market Overview.


2



---



##### Table of Contents





Station Performance. Northwest Afternoon


KATU, Portland, Oregon


Market Overview.


Station Performance. AM Northwest


KVAL TV, KCBY TV, KPIC TV, Eugene, Coos Bay and Roseburg,
Oregon


Market Overview.


Station Performance.


3



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##### Table of Contents





KIMA TV, KEPR TV, KLEW TV, Yakima and Tri-Cities, Washington
and Lewiston, Idaho.


Market Overview.




Station Performance.


KBCI TV, Boise, Idaho


Market Overview.


Station Performance.


4



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##### Table of Contents



KIDK TV, Idaho Falls-Pocatello, Idaho


Market Overview.


Station Performance.


Television Broadcasting Industry








Television Broadcasting Competition




5



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##### Table of Contents





Audience.






Programming.


Advertising. make-up


6



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##### Table of Contents



Radio Markets and Stations


Seattle Radio




|            |  |         |         |  |               |  |           |          |  |                    |         |  |  |           |    |  |          |  |     |        |  |  |      |  |  |  |                        | 
|----------- |  | ------- | ------- |  | ------------- |  | --------- | -------- |  | ------------------ | ------- |  |  | --------- | -- |  | -------- |  | --- | ------ |  |  | ---- |  |  |  | ---------------------- | 
|            |  |         |         |  |               |  |           |          |  | Audience Listening |         |  | 
|            |  |         |         |  |               |  |           | National |  |                    |         |  |  |          
|            |  |         |         |  |               |  |           | Market   |  |                    | Rank in |  |  | Station   |    |  |         
|Market      |  | Station |         |  | Dial Position |  |           | Power    |  |                    | Rank(1) |  |  | Market(2) |    |  | Share(2) |  |     | Format | 
|            |  |         |         |  |               |  |           |          |  |                    |         |  |  |           |    |  |          |  |     |        | 
|Seattle, WA |  |         |         |  |               |  |           |          |  |                    |         |  |  |           | 14 |  |          |  |     |        |  |  |      |  |  |  |                        | 
|            |  |         | KOMO AM |  |               |  | 1000 kHz  |          |  |                    | 50 kW   |  |  |           |    |  |          |  | 6   |        |  |  | 3.8% |  |  |  | News                   | 
|            |  |         | KVI AM  |  |               |  | 570 kHz   |          |  |                    | 5 kW    |  |  |           |    |  |          |  | 12T |        |  |  | 2.9% |  |  |  | Talk                   | 
|            |  |         | KPLZ FM |  |               |  | 101.5 MHz |          |  |                    | 100 kW  |  |  |           |    |  |          |  | 21  |        |  |  | 2.2% |  |  |  | Hot Adult Contemporary | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | National Market Rank for Seattle, WA is based on 2005 data from
    the Arbitron Company.                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(2) | Rank and station information in the above chart refers to
    average quarter-hour share of listenership to commercial
    stations among total persons, age 12+, Monday through
    Sunday, 6 a.m. to midnight, and is subject to the
    qualifications listed in each report. Source: Seattle,
    Washington: Arbitron Radio market Report four-book
    average  Winter 2005  Fall 2005. There are
    56 radio stations in the Seattle market. T refers to
    tie. Source: BIA Financial Network, Inc.





7



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##### Table of Contents



Fisher Radio Regional Group




|                |  |         |           |      |          |  |          |                    |         |  |           |         |  |          |    |  |        |  |       |  |  |                        
|--------------- |  | ------- | --------- | ---- | -------- |  | -------- | ------------------ | ------- |  | --------- | ------- |  | -------- | -- |  | ------ |  | ----- |  |  | -----------------------
|                |  |         |           |      |          |  |          | Audience Listening |         |  |          
|                |  |         |           |      |          |  |          |                    |         |  |          
|                |  |         |           | Dial |          |  |          |                    | Rank in |  |           | Station |  |          |   
|Market          |  | Station |           |      | Position |  |          | Power              |         |  | Market(1) |         |  | Share(1) |    |  | Format
|                |  |         |           |      |          |  |          |                    |         |  |           |         |  |          |    |  |       
|Billings, MT    |  |         |           |      |          |  |          |                    |         |  |           |         |  |          |    |  |        |  |       |  |  |                        
|                |  |         | KRKX      |      |          |  | 94.1 FM  |                    |         |  | 100kW     |         |  |          | 8  |  |        |  | 4.7%  |  |  | Classic Rock           
|                |  |         | KRZN      |      |          |  | 96.3 FM  |                    |         |  | 100kW     |         |  |          | 3T |  |        |  | 7.1%  |  |  | Active Rock            
|                |  |         | KYYA      |      |          |  | 93.3 FM  |                    |         |  | 100kW     |         |  |          | 9T |  |        |  | 4.1%  |  |  | Hot Adult Contemporary 
|                |  |         | KBLG (2)  |      |          |  | 910 AM   |                    |         |  | 1kW (2    | )       |  |          | 9T |  |        |  | 4.1%  |  |  | News/Talk              
|Missoula, MT    |  |         |           |      |          |  |          |                    |         |  |           |         |  |          |    |  |        |  |       |  |  |                        
|                |  |         | KZOQ      |      |          |  | 100.1 FM |                    |         |  | 13.5 kW   |         |  |          | 4  |  |        |  | 6.0%  |  |  | Classic Rock           
|                |  |         | KXDR      |      |          |  | 98.7 FM  |                    |         |  | 100kW     |         |  |          | 8  |  |        |  | 4.4%  |  |  | Hot Adult Contemporary 
|                |  |         | KGGL      |      |          |  | 93.3 FM  |                    |         |  | 43 kW     |         |  |          | 1  |  |        |  | 11%   |  |  | Country                
|                |  |         | KYLT      |      |          |  | 1340 AM  |                    |         |  | 1 kW      |         |  |          |    |  |        |  | bmrs  |  |  | Talk                   
|                |  |         | KGRZ      |      |          |  | 1450 AM  |                    |         |  | 1 kW      |         |  |          | 13 |  |        |  | 1.8%  |  |  | Sports/Talk            
|                |  |         | KBQQ      |      |          |  | 106.7 FM |                    |         |  | 13.5 kW   |         |  |          | 6  |  |        |  | 5.8%  |  |  | Oldies                 
|Great Falls, MT |  |         |           |      |          |  |          |                    |         |  |           |         |  |          |    |  |        |  |       |  |  |                        
|                |  |         | KAAK      |      |          |  | 98.9 FM  |                    |         |  | 100 kW    |         |  |          | 1T |  |        |  | 11.2% |  |  | Hot Adult Contemporary 
|                |  |         | KINX      |      |          |  | 107.3 FM |                    |         |  | 94 kW     |         |  |          | 8T |  |        |  | 5.1%  |  |  | Variety                
|                |  |         | KQDI (FM) |      |          |  | 106.1 FM |                    |         |  | 100 kW    |         |  |          | 6  |  |        |  | 7.1%  |  |  | Classic Rock           
|                |  |         | KXGF      |      |          |  | 1400 AM  |                    |         |  | 1 kW      |         |  |          | 12 |  |        |  | 2.0%  |  |  | E.S.P.N. Sports        
|                |  |         | KQDI (AM) |      |          |  | 1450 AM  |                    |         |  | 1 kW      |         |  |          | 8T |  |        |  | 5.1%  |  |  | News/Talk              
|                |  |         | KIKF      |      |          |  | 104.9 FM |                    |         |  | 94 kW     |         |  |          | 4T |  |        |  | 8.2%  |  |  | Country                
|Butte, MT       |  |         |           |      |          |  |          |                    |         |  |           |         |  |          |    |  |        |  |       |  |  |                        
|                |  |         | KMBR      |      |          |  | 95.5 FM  |                    |         |  | 50 kW     |         |  |          | 5T |  |        |  | 7.3%  |  |  | Classic Rock           
|                |  |         | KAAR      |      |          |  | 92.5 FM  |                    |         |  | 4.5 kW    |         |  |          | 1  |  |        |  | 23.4% |  |  | Country                
|                |  |         | KXTL      |      |          |  | 1370 AM  |                    |         |  | 5 kW      |         |  |          | 4  |  |        |  | 7.7%  |  |  | Oldies/Talk            
|Wenatchee, WA   |  |         |           |      |          |  |          |                    |         |  |           |         |  |          |    |  |        |  |       |  |  |                        
|                |  |         | KYSN      |      |          |  | 97.7 FM  |                    |         |  | 9.3 kW    |         |  |          | 5  |  |        |  | 6.6%  |  |  | Country                
|                |  |         | KWWW(3)   |      |          |  | 96.7 FM  |                    |         |  | 0.4 kW    |         |  |          | 3  |  |        |  | 7.9%  |  |  | Hot Adult Contemporary 
|                |  |         | KZPH      |      |          |  | 106.7 FM |                    |         |  | 6kW       |         |  |          | 7  |  |        |  | 4.7%  |  |  | Classic Rock           
|                |  |         | KAAP      |      |          |  | 99.5 FM  |                    |         |  | 5.3 kW    |         |  |          | 9  |  |        |  | 2.5%  |  |  | Soft Adult Contemporary
|                |  |         | KWWX      |      |          |  | 1340 AM  |                    |         |  | 1 kW      |         |  |          | 10 |  |        |  | 1.8%  |  |  | Spanish                






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Rank and station information in the above chart refers to
    average quarter-hour share of listenership to commercial
    stations among total persons, age 12+, Monday through
    Sunday, 6 a.m. to midnight, and is subject to the
    qualifications listed in each report. Sources:
    (a) Billings, Montana: Arbitron Ratings, Fall, 2005;
    (b) Missoula, Montana: Eastlan Resources, Fall, 2005
    Missoula/ Hamilton Market Report; (c) Great Falls, Montana:
    Arbitron Ratings, Fall, 2005; (d) Butte, Montana: Arbitron
    Ratings 2005 Montana County Coverage Study, Silver Bow County;
    and (e) Wenatchee, Washington: Eastlan Resources Audience
    Measurement, Fall 2005 Wenatchee Market Report. T
    refers to tie. bmrs refers to below minimum
    reporting standards.
|   
|(2) | KBLG, Billings, operates with power of 1,000 watts during the
    day and 64 watts during the night.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(3) | KWWW serves the city of Wenatchee via a translator, owned by an
    outside party. The translator broadcasts at 103.9 on the FM
    dial, with a licensed output power of 10 watts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

8



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##### Table of Contents





Billings


Missoula


Great Falls


Butte


Wenatchee,
Quincy and Moses Lake


Radio Broadcasting Industry


over-the




Radio Broadcasting Competition








9



---



##### Table of Contents



KOMO-AM


Audience.


over-the


Advertising. make-up


10



---



##### Table of Contents





Federal Regulation




Programming and Operation.


New Licenses.


Assignments and Transfers.


License Renewal.






11



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##### Table of Contents





|        |  |             |                              |  |                 |  |                  | 
|------- |  | ----------- | ---------------------------- |  | --------------- |  | ---------------- | 
|Station |  | Market Area |                              |  | Expiration Date | 
|        |  |             |                              |  |                 | 
|KOMO    |  |             | Seattle-Tacoma, WA           |  |                 |  | February 1, 2007 | 
|KATU    |  |             | Portland, OR                 |  |                 |  | February 1, 2007 | 
|KVAL    |  |             | Eugene, OR                   |  |                 |  | February 1, 2007 | 
|KCBY    |  |             | Eugene, OR                   |  |                 |  | February 1, 2007 | 
|KPIC    |  |             | Roseburg, OR                 |  |                 |  | February 1, 2007 | 
|KIMA    |  |             | Yakima, WA                   |  |                 |  | February 1, 2007 | 
|KEPR    |  |             | Pasco/Richland/Kennewick, WA |  |                 |  | February 1, 2007 | 
|KLEW    |  |             | Lewiston, ID                 |  |                 |  | October 1, 2006  | 
|KBCI    |  |             | Boise, ID                    |  |                 |  | October 1, 2006  | 
|KIDK    |  |             | Idaho Falls-Pocatello, ID    |  |                 |  | October 1, 2006  | 



Ownership Restrictions.




| |                                     
| | ------------------------------------
| | National Television Ownership Limits





| |                                  
| | ---------------------------------
| | Local Television Ownership Limits





| |                             
| | ----------------------------
| | Local Radio Ownership Limits



12



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##### Table of Contents





| |                             
| | ----------------------------
| | Cross-Ownership Restrictions







Local Marketing Agreements.


Joint Sales Agreements.


Biennial Regulatory Reviews.


13



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##### Table of Contents





Omnibus Appropriations Act.


Alien Ownership.


Network Affiliate Issues.


Other Matters.




14



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##### Table of Contents





Proposed Legislation and Regulation.


Digital/ High Definition Television (HDTV)








|        |  |             |                              |         |            |  |                 |                   |  |  |           |  
|------- |  | ----------- | ---------------------------- | ------- | ---------- |  | --------------- | ----------------- |  |  | --------- | -
|        |  |             |                              | Digital |            |  | Currently       |                  
|        |  |             |                              | Channel |            |  | Broadcasting in |                  
|Station |  | Market Area |                              |         | Allocation |  |                 | Digital Format(1) | 
|        |  |             |                              |         |            |  |                 |                   | 
|KOMO    |  |             | Seattle-Tacoma, WA           |         |            |  | 38              |                   |  |  | Yes (HDTV | )
|KATU    |  |             | Portland, OR                 |         |            |  | 43              |                   |  |  | Yes (HDTV | )
|KVAL    |  |             | Eugene, OR                   |         |            |  | 25              |                   |  |  | Yes (HDTV | )
|KCBY    |  |             | Coos Bay, OR                 |         |            |  | 21              |                   |  |  | Yes       |  
|KPIC    |  |             | Roseburg, OR                 |         |            |  | 19              |                   |  |  | Yes       |  
|KBCI    |  |             | Boise, ID                    |         |            |  | 28              |                   |  |  | Yes (HDTV | )
|KIMA    |  |             | Yakima, WA                   |         |            |  | 33              |                   |  |  | Yes       |  
|KEPR    |  |             | Pasco/Richland/Kennewick, WA |         |            |  | 18              |                   |  |  | Yes       |  
|KLEW    |  |             | Lewiston, ID                 |         |            |  | 32              |                   |  |  | Yes       |  
|KIDK    |  |             | Idaho Falls-Pocatello, ID    |         |            |  | 36              |                   |  |  | Yes       |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The FCC set May 1, 2002 as the deadline for initial DTV
    operations by all commercial TV stations. We met that date with
    respect to each of our stations. We have constructed and
    commenced DTV operation of stations KOMO-DT, Seattle, KATU-DT,
    Portland, KVAL-DT, Eugene and KBCI-DT, Boise with full power
    facilities pursuant to authorizations issued by the FCC. Each of
    the remaining stations operated by us has commenced DTV
    operations with reduced facilities pursuant to special temporary
    authority (STA) granted by the FCC. The FCCs
    rules require that permanent digital facilities be in place for
    each of these stations by July 1, 2006, or the station will
    lose interference protection beyond the areas served on that
    date. Congress recently passed legislation setting a
    hard analog to digital transition date of
    February 17, 2009. On that date, all analog television
    stations must cease analog transmissions

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| |                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | and operate only using digital technology, and all stations that
    were given a paired channel must cease operation on
    one channel so that the spectrum may be made available for other
    use.









Fisher Plaza




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Investment in Safeco Corporation




Available Information


10-K, 10-Q, 8-K,





ITEM 1A.     RISK FACTORS


The following risk factors and other information included in
this annual report should be carefully considered. The risks and
uncertainties described below are not the only ones we face.
Additional risks and uncertainties not presently known to us or
that we currently deem immaterial also may impair our business
operations. If any of the following risks occur, our business,
financial condition and future results could be harmed.


We depend on advertising
revenues, which fluctuate as a result of a number of
factors.






| |   |                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the health of the national economy, and particularly the economy
    of the Northwest region and Seattle, Washington and Portland,
    Oregon;                                                                                
|
| |  | the popularity of our programming;                                                                                                                                                                                            
|
| |  | changes in the makeup of the population in the areas where our
    stations are located;                                                                                                                                      
|
| |  | pricing fluctuations in local and national advertising;                                                                                                                                                                       
|
| |  | the activities of our competitors, including increased
    competition from other forms of advertising-based mediums,
    particularly network, cable television, direct satellite
    television and radio, and the Internet;
|
| |  | the use of new services and devices which allow viewers to
    minimize commercial advertisements, such as satellite radio and
    personal digital video recorders; and                                                      
|
| |  | other factors that may be beyond our control.                                                                                                                                                                                 







| |                                                                                                             
| | ------------------------------------------------------------------------------------------------------------
| | We have incurred losses in the past. We cannot assure you
    that we will be able to achieve profitability.



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| |                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------
| | Our operating results are dependent on the success of
    programming aired by our television and radio stations.







| |                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Competition in the broadcasting industry and the rise of
    alternative entertainment and communications media may result in
    loss of audience share and advertising revenue by our
    stations.





| |   |                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | local network affiliates and independent stations;                                                                                                                                                               
|
| |  | cable, direct broadcast satellite and alternative methods of
    broadcasting brought about by technological advances and
    innovations, such as pay-per-view and home video and
    entertainment systems; and
|
| |  | other sources of news, information and entertainment, such as
    streaming video broadcasts over the Internet, podcasting,
    newspapers, movie theaters and live sporting events.                             





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| |                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Because significant portions of our cost of services are
    relatively fixed, downturns in the economy harm our operations,
    revenue, cash flow and earnings.





| |                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------
| | We may experience disruptions in our business if we
    acquire and integrate new television or radio stations.





| |                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------
| | Radio and television programming revenue may be negatively
    affected by the cancellation of syndication agreements.





| |                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our indebtedness could materially and adversely affect our
    business and prevent us from fulfilling our obligations under
    our 8.625% senior notes due 2014





| |   |                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------
| |  | increase our vulnerability to general adverse economic and
    industry conditions or a downturn in our business;                  
|
| |  | reduce the availability of our cash flow to fund working
    capital, capital expenditures and other general business
    purposes;
|
| |  | reduce the funds available to purchase the rights to television
    and radio programs;                                            

19



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| |   |                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------
| |  | limit our flexibility in planning for, or reacting to, changes
    in our industries, making us more vulnerable to economic
    downturns; and
|
| |  | place us at a competitive disadvantage compared to our
    competitors that have less debt.                                                   
|
| |  | limit our ability to make certain asset dispositions.                                                                                         





| |                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------
| | The non-renewal or modification of affiliation agreements
    with major television networks could harm our operating
    results.







| |                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Changes in FCC regulations regarding ownership have
    increased the uncertainty surrounding the competitive position
    of our stations in the markets we serve.







20



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| |                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The FCCs extensive regulation of the broadcasting
    industry limits our ability to own and operate television and
    radio stations and other media outlets.







| |                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------
| | We will be required to make additional investments in HDTV
    technology, which could harm our ability to fund other
    operations or repay debt.





| |                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may lose audience share and advertising revenue if we
    are unable to reach agreement with cable and satellite companies
    regarding the retransmission of signals of our television
    stations.



21



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direct-to direct-to




| |                                                                   
| | ------------------------------------------------------------------
| | Dependence on key personnel may expose us to additional
    risks.





| |                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A reduction on the periodic dividend on the common stock
    of Safeco Corporation may adversely affect our other income,
    cash flow and earnings. A reduction in the share price of Safeco
    Corporation may adversely affect our total assets and
    stockholders equity.





| |                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Failure of our information technology systems would
    disrupt our operations, which could reduce our customer base and
    result in lost revenue. Our computer systems are vulnerable to
    viruses, unauthorized tampering, system failures and potential
    obsolescence.





| |                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our ownership and operation of Fisher Plaza is subject to
    risks, including those relating to the economic climate, local
    real estate conditions, potential inability to provide adequate
    management, maintenance and insurance, potential collection
    problems, reliance on significant tenants, and regulatory
    risks.



22



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| |                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We are subject to the ongoing internal control provisions
    of Section 404 of the Sarbanes-Oxley Act of 2002. Material
    weaknesses in internal control, if identified in future periods,
    could indicate a lack of proper controls to generate accurate
    financial statements.

10-K.




| |                                                                                                             
| | ------------------------------------------------------------------------------------------------------------
| | Our operations may be adversely affected by earthquakes
    and other natural catastrophes in the Northwest.





| |                                                               
| | --------------------------------------------------------------
| | A write-down of goodwill would harm our operating
    results.





| |                                                                                                
| | -----------------------------------------------------------------------------------------------
| | Foreign hostilities and terrorist attacks may affect our
    revenue and results of operations.



23



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|         |                          
|-------- | -------------------------
|ITEM 1B. | UNRESOLVED STAFF COMMENTS








|        |                          
|------- | -------------------------
|ITEM 2. | DESCRIPTION OF PROPERTIES

30-year











|        |                  
|------- | -----------------
|ITEM 3. | LEGAL PROCEEDINGS



24



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|        |                                                          
|------- | ---------------------------------------------------------
|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITIES
    HOLDERS






PART II







|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
    STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES



|        |  |                                     |       |  |      |   |       |      |  |   |       |  |  |   |       | 
|------- |  | ----------------------------------- | ----- |  | ---- | - | ----- | ---- |  | - | ----- |  |  | - | ----- | 
|        |  | Quarterly Common Stock Price Ranges |      
|        |  |                                     |      
|        |  | 2005                                |       |  | 2004 |  
|        |  |                                     |       |  |      |  
|Quarter |  | High                                |       |  | Low  |   |       | High |  |   | Low   | 
|        |  |                                     |       |  |      |   |       |      |  |   |       | 
|1st     |  | $                                   | 52.60 |  |      | $ | 46.46 |      |  | $ | 52.50 |  |  | $ | 45.80 | 
|2nd     |  |                                     | 51.90 |  |      |   | 46.91 |      |  |   | 52.00 |  |  |   | 45.61 | 
|3rd     |  |                                     | 49.28 |  |      |   | 42.56 |      |  |   | 51.09 |  |  |   | 45.02 | 
|4th     |  |                                     | 49.89 |  |      |   | 41.43 |      |  |   | 49.86 |  |  |   | 46.03 | 






Dividends




25



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|        |                         
|------- | ------------------------
|ITEM 6. | SELECTED FINANCIAL DATA.

10-K.


|                                          |                                                     |                                          |         |        |      |   |         |         |   |   |         |         |   |      |         |         |   |   |         |        |  
|----------------------------------------- | --------------------------------------------------- | ---------------------------------------- | ------- | ------ | ---- | - | ------- | ------- | - | - | ------- | ------- | - | ---- | ------- | ------- | - | - | ------- | ------ | -
|                                          |                                                     | Year Ended December 31,                  |        
|                                          |                                                     |                                          |        
|                                          |                                                     | 2005                                     |         |        | 2004 |   |         | 2003    |   |   | 2002    |         |   | 2001 |        
|                                          |                                                     |                                          |         |        |      |   |         |         |   |   |         |         |   |      |        
|                                          |                                                     | (In thousands, except per-share amounts) |        
|Revenue from continuing operations        |                                                     | $                                        | 149,319 |        |      | $ | 153,866 |         |   | $ | 138,387 |         |   | $    | 126,696 |         |   | $ | 134,008 |       
|                                          |                                                     |                                          |         |        |      |   |         |         |   |   |         |         |   |      |        
|Income (loss)                             |                                                     |                                          |         |        |      |   |         |         |   |   |         |         |   |      |         |         |   |   |         |       
|                                          | From continuing operations                          |                                          | $       | (5,072 | )    |   | $       | (11,821 | ) |   | $       | (14,804 | ) |      | $       | (7,546  | ) |   | $       | (1,437 | )
|                                          | From discontinued operations                        |                                          |         |        |      |   |         | (132    | ) |   |         | 23,032  |   |      |         | 5,173   |   |   |         | (6,826 | )
|                                          | Cumulative effect of change in accounting principle |                                          |         |        |      |   |         |         |   |   |         |         |   |      |         | (64,373 | ) |   |         |        |  
|                                          |                                                     |                                          |         |        |      |   |         |         |   |   |         |         |   |      |        
|                                          | Net income (loss)                                   |                                          | $       | (5,072 | )    |   | $       | (11,953 | ) |   | $       | 8,228   |   |      | $       | (66,746 | ) |   | $       | (8,263 | )
|                                          |                                                     |                                          |         |        |      |   |         |         |   |   |         |         |   |      |        
|Per share data                            |                                                     |                                          |         |        |      |   |         |         |   |   |         |         |   |      |         |         |   |   |         |       
|Income (loss) per share  basic           |                                                     |                                          |         |        |      |   |         |         |   |   |         |         |   |      |         |         |   |   |         |       
|                                          | From continuing operations                          |                                          | $       | (0.58  | )    |   | $       | (1.37   | ) |   | $       | (1.72   | ) |      | $       | (0.88   | ) |   | $       | (0.16  | )
|                                          | From discontinued operations                        |                                          |         |        |      |   |         | (0.02   | ) |   |         | 2.68    |   |      |         | 0.61    |   |   |         | (0.80  | )
|                                          | Cumulative effect of change in accounting principle |                                          |         |        |      |   |         |         |   |   |         |         |   |      |         | (7.50   | ) |   |         |        |  
|                                          |                                                     |                                          |         |        |      |   |         |         |   |   |         |         |   |      |        
|                                          | Net income (loss)                                   |                                          | $       | (0.58  | )    |   | $       | (1.39   | ) |   | $       | 0.96    |   |      | $       | (7.77   | ) |   | $       | (0.96  | )
|                                          |                                                     |                                          |         |        |      |   |         |         |   |   |         |         |   |      |        
|Income (loss) per share assuming dilution |                                                     |                                          |         |        |      |   |         |         |   |   |         |         |   |      |         |         |   |   |         |       
|                                          | From continuing operations                          |                                          | $       | (0.58  | )    |   | $       | (1.37   | ) |   | $       | (1.72   | ) |      | $       | (0.88   | ) |   | $       | (0.16  | )
|                                          | From discontinued operations                        |                                          |         |        |      |   |         | (0.02   | ) |   |         | 2.68    |   |      |         | 0.61    |   |   |         | (0.80  | )
|                                          | Cumulative effect of change in accounting principle |                                          |         |        |      |   |         |         |   |   |         |         |   |      |         | (7.50   | ) |   |         |        |  
|                                          |                                                     |                                          |         |        |      |   |         |         |   |   |         |         |   |      |        
|                                          | Net income (loss)                                   |                                          | $       | (0.58  | )    |   | $       | (1.39   | ) |   | $       | 0.96    |   |      | $       | (7.77   | ) |   | $       | (0.96  | )
|                                          |                                                     |                                          |         |        |      |   |         |         |   |   |         |         |   |      |        
|                                          | Cash dividends declared                             |                                          | $       |       |      |   | $       |        |   |   | $       |        |   |      | $       | 0.52    |   |   | $       | 0.78   |  

|                     |  |              |         |  |      |   |         |      |  |   |         |  |  |      |         |  |  |   |         | 
|-------------------- |  | ------------ | ------- |  | ---- | - | ------- | ---- |  | - | ------- |  |  | ---- | ------- |  |  | - | ------- | 
|                     |  | December 31, |        
|                     |  |              |        
|                     |  | 2005         |         |  | 2004 |   |         | 2003 |  |   | 2002    |  |  | 2001 |        
|                     |  |              |         |  |      |   |         |      |  |   |         |  |  |      |        
|Working capital      |  | $            | 35,562  |  |      | $ | 33,181  |      |  | $ | 23,219  |  |  | $    | 60,437  |  |  | $ | 9,380   | 
|Total assets         |  |              | 440,393 |  |      |   | 435,872 |      |  |   | 396,685 |  |  |      | 545,991 |  |  |   | 623,117 | 
|Total debt(1)        |  |              | 150,000 |  |      |   | 150,053 |      |  |   | 128,857 |  |  |      | 292,607 |  |  |   | 286,949 | 
|Stockholders equity |  |              | 209,621 |  |      |   | 202,453 |      |  |   | 187,804 |  |  |      | 172,735 |  |  |   | 237,155 | 






|    |                                  
|--- | ---------------------------------
|(1) | Includes discontinued operations.






|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
    POSITION AND RESULTS OF OPERATIONS

10-K


26



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Overview












27



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##### Table of Contents









Critical Accounting Policies




Goodwill and indefinite-lived intangible assets.




28



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##### Table of Contents



Tangible Long-Lived Assets.




Derivative instruments.






Television and radio broadcast rights.


Pensions.


29



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##### Table of Contents







Tax Accruals.


Allowance for doubtful accounts.


Estimates.


Consolidated Results of Operations




30



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|                                                                |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |         |   |         |        |        |   |  |       |       |   
|--------------------------------------------------------------- | -------------------------- | ---------------------- | ------- | ------- | --------- | - | ------- | ------------ | ------- | - | --------- | ------- | ------- | ---- |  | ----- | ----- | -- | ------- | ------- | ------- | - | ------- | ------ | ------ | - |  | ----- | ----- | --
|                                                                |                            | Year Ended             |         |         | 2005-2004 |   |         | Year Ended   |         |   | 2004-2003 |        
|                                                                |                            | December 31,           |         |         | Variance  |   |         | December 31, |         |   | Variance  |        
|                                                                |                            |                        |         |         |           |   |         |              |         |   |           |        
|                                                                |                            | 2005                   |         |         | 2004      |   |         | $            |         |   | %         |         |         | 2003 |  |       | $     |    |         | %       |        
|                                                                |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |        
|                                                                |                            | (Dollars in thousands) |        
|Revenue                                                         |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |         |   |         |        |        |   |  |      
|                                                                | Television                 |                        | $       | 93,083  |           |   | $       | 101,190      |         |   | $         | (8,107  | )       |      |  | (8.0  | )%    |    | $       | 88,676  |         |   | $       | 12,514 |        |   |  | 14.1  | %    
|                                                                | Radio                      |                        |         | 48,334  |           |   |         | 48,253       |         |   |           | 81      |         |      |  | 0.2   | %     |    |         | 44,221  |         |   |         | 4,032  |        |   |  | 9.1   | %    
|                                                                | Fisher Plaza               |                        |         | 8,061   |           |   |         | 4,555        |         |   |           | 3,506   |         |      |  | 77.0  | %     |    |         | 5,494   |         |   |         | (939   | )      |   |  | (17.1 | )%   
|                                                                | Corporate and eliminations |                        |         | (159    | )         |   |         | (132         | )       |   |           | (27     | )       |      |  |       |       |    |         | (4      | )       |   |         | (128   | )      |   |  |       |      
|                                                                |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |        
|                                                                |                            | Consolidated           |         |         | 149,319   |   |         |              | 153,866 |   |           |         | (4,547  | )    |  |       | (3.0  | )% |         |         | 138,387 |   |         |        | 15,479 |   |  |       | 11.2  | % 
|Cost of services sold                                           |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |         |   |         |        |        |   |  |      
|                                                                | Television                 |                        |         | 46,293  |           |   |         | 43,621       |         |   |           | 2,672   |         |      |  | 6.1   | %     |    |         | 44,602  |         |   |         | (981   | )      |   |  | (2.2  | )%   
|                                                                | Radio                      |                        |         | 23,192  |           |   |         | 22,239       |         |   |           | 953     |         |      |  | 4.3   | %     |    |         | 22,438  |         |   |         | (199   | )      |   |  | (0.9  | )%   
|                                                                | Fisher Plaza               |                        |         | 2,751   |           |   |         | 1,657        |         |   |           | 1,094   |         |      |  | 66.0  | %     |    |         | 1,499   |         |   |         | 158    |        |   |  | 10.5  | %    
|                                                                | Corporate and eliminations |                        |         | 1,562   |           |   |         | 1,606        |         |   |           | (44     | )       |      |  | (2.7  | )%    |    |         | 644     |         |   |         | 962    |        |   |  | 149.4 | %    
|                                                                |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |        
|                                                                |                            | Consolidated           |         |         | 73,798    |   |         |              | 69,123  |   |           |         | 4,675   |      |  |       | 6.8   | %  |         |         | 69,183  |   |         |        | (60    | ) |  |       | (0.1  | )%
|Selling expenses                                                |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |         |   |         |        |        |   |  |      
|                                                                | Television                 |                        |         | 17,224  |           |   |         | 11,995       |         |   |           | 5,229   |         |      |  | 43.6  | %     |    |         | 11,283  |         |   |         | 712    |        |   |  | 6.3   | %    
|                                                                | Radio                      |                        |         | 14,722  |           |   |         | 14,730       |         |   |           | (8      | )       |      |  | (0.1  | )%    |    |         | 13,753  |         |   |         | 977    |        |   |  | 7.1   | %    
|                                                                | Fisher Plaza               |                        |         | 398     |           |   |         | 901          |         |   |           | (503    | )       |      |  | (55.8 | )%    |    |         | 223     |         |   |         | 678    |        |   |  | 304.0 | %    
|                                                                |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |        
|                                                                |                            | Consolidated           |         |         | 32,344    |   |         |              | 27,626  |   |           |         | 4,718   |      |  |       | 17.1  | %  |         |         | 25,259  |   |         |        | 2,367  |   |  |       | 9.4   | % 
|General and administrative expenses                             |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |         |   |         |        |        |   |  |      
|                                                                | Television                 |                        |         | 16,949  |           |   |         | 17,110       |         |   |           | (161    | )       |      |  | (0.9  | )%    |    |         | 17,430  |         |   |         | (320   | )      |   |  | (1.8  | )%   
|                                                                | Radio                      |                        |         | 7,748   |           |   |         | 7,637        |         |   |           | 111     |         |      |  | 1.5   | %     |    |         | 7,995   |         |   |         | (358   | )      |   |  | (4.5  | )%   
|                                                                | Fisher Plaza               |                        |         | 730     |           |   |         | 979          |         |   |           | (249    | )       |      |  | (25.4 | )%    |    |         | 1,073   |         |   |         | (94    | )      |   |  | (8.8  | )%   
|                                                                | Corporate and eliminations |                        |         | 8,647   |           |   |         | 8,956        |         |   |           | (309    | )       |      |  | (3.5  | )%    |    |         | 13,331  |         |   |         | (4,375 | )      |   |  | (32.8 | )%   
|                                                                |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |        
|                                                                |                            | Consolidated           |         |         | 34,074    |   |         |              | 34,682  |   |           |         | (608    | )    |  |       | (1.8  | )% |         |         | 39,829  |   |         |        | (5,147 | ) |  |       | (12.9 | )%
|Depreciation and amortization                                   |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |         |   |         |        |        |   |  |      
|                                                                | Television                 |                        |         | 7,940   |           |   |         | 10,588       |         |   |           | (2,648  | )       |      |  | (25.0 | )%    |    |         | 11,700  |         |   |         | (1,112 | )      |   |  | (9.5  | )%   
|                                                                | Radio                      |                        |         | 1,356   |           |   |         | 1,460        |         |   |           | (104    | )       |      |  | (7.1  | )%    |    |         | 1,535   |         |   |         | (75    | )      |   |  | (4.9  | )%   
|                                                                | Fisher Plaza               |                        |         | 3,544   |           |   |         | 3,762        |         |   |           | (218    | )       |      |  | (5.8  | )%    |    |         | 2,588   |         |   |         | 1,174  |        |   |  | 45.4  | %    
|                                                                | Corporate and eliminations |                        |         | 245     |           |   |         | 207          |         |   |           | 38      |         |      |  | 18.4  | %     |    |         | 357     |         |   |         | (150   | )      |   |  | (42.0 | )%   
|                                                                |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |        
|                                                                |                            | Consolidated           |         |         | 13,085    |   |         |              | 16,017  |   |           |         | (2,932  | )    |  |       | (18.3 | )% |         |         | 16,180  |   |         |        | (163   | ) |  |       | (1.0  | )%
|Income (loss) from operations                                   |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |         |   |         |        |        |   |  |      
|                                                                | Television                 |                        |         | 4,677   |           |   |         | 17,876       |         |   |           | (13,199 | )       |      |  |       |       |    |         | 3,661   |         |   |         | 14,215 |        |   |  |       |      
|                                                                | Radio                      |                        |         | 1,316   |           |   |         | 2,187        |         |   |           | (871    | )       |      |  |       |       |    |         | (1,500  | )       |   |         | 3,687  |        |   |  |       |      
|                                                                | Fisher Plaza               |                        |         | 638     |           |   |         | (2,744       | )       |   |           | 3,382   |         |      |  |       |       |    |         | 111     |         |   |         | (2,855 | )      |   |  |       |      
|                                                                | Corporate and eliminations |                        |         | (10,613 | )         |   |         | (10,901      | )       |   |           | 288     |         |      |  |       |       |    |         | (14,336 | )       |   |         | 3,435  |        |   |  |       |      
|                                                                |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |        
|                                                                |                            | Consolidated           |         |         | (3,982    | ) |         |              | 6,418   |   |           |         | (10,400 | )    |  |       |       |    |         |         | (12,064 | ) |         |        | 18,482 |   |  |       |       |   
|Net loss on derivative instruments                              |                            |                        |         |         |           |   | (12,656 | )            |         |   | 12,656    |         |         |      |  |       |       |    | (6,911  | )       |         |   | (5,745  | )      |        |   |  |      
|Loss from extinguishment of long-term debt                      |                            |                        |         |         |           |   | (5,034  | )            |         |   | 5,034     |         |         |      |  |       |       |    | (2,204  | )       |         |   | (2,830  | )      |        |   |  |      
|Other income, net                                               |                            |                        | 3,674   |         |           |   | 3,421   |              |         |   | 253       |         |         |      |  |       |       |    | 6,427   |         |         |   | (3,006  | )      |        |   |  |      
|Interest expense, net                                           |                            |                        | (13,726 | )       |           |   | (11,776 | )            |         |   | (1,950    | )       |         |      |  |       |       |    | (13,081 | )       |         |   | 1,305   |        |        |   |  |      
|                                                                |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |        
|Loss from continuing operations before income taxes             |                            |                        | (14,034 | )       |           |   | (19,627 | )            |         |   | 5,593     |         |         |      |  |       |       |    | (27,833 | )       |         |   | 8,206   |        |        |   |  |      
|Benefit for federal and state income taxes                      |                            |                        | (8,962  | )       |           |   | (7,806  | )            |         |   | (1,156    | )       |         |      |  |       |       |    | (13,029 | )       |         |   | 5,223   |        |        |   |  |      
|                                                                |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |        
|Loss from continuing operations                                 |                            |                        | (5,072  | )       |           |   | (11,821 | )            |         |   | 6,749     |         |         |      |  |       |       |    | (14,804 | )       |         |   | 2,983   |        |        |   |  |      
|Income (loss) from discontinued operations, net of income taxes |                            |                        |         |         |           |   | (132    | )            |         |   | 132       |         |         |      |  |       |       |    | 23,032  |         |         |   | (23,164 | )      |        |   |  |      
|                                                                |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |        
|Net income (loss)                                               |                            | $                      | (5,072  | )       |           | $ | (11,953 | )            |         | $ | 6,881     |         |         |      |  |       |       | $  | 8,228   |         |         | $ | (20,181 | )      |        |   |  |      
|                                                                |                            |                        |         |         |           |   |         |              |         |   |           |         |         |      |  |       |       |    |         |         |        

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Comparison of Fiscal Years Ended December 31, 2005,
December 31, 2004, and December 31, 2003


Revenue














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Cost of services sold










Selling expenses




five-year








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General and administrative expenses














Depreciation and amortization






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Net loss on derivative instruments














Loss from extinguishment of long-term debt






Other income, net




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Interest expense, net






Benefit for federal and state income taxes




Liquidity and Capital
Resources






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Future contractual obligations are as follows (in
thousands):


|                             |  |            |         |  |           |   |        |             |  |   |             |  |  |       |       |  |  |   |         | 
|---------------------------- |  | ---------- | ------- |  | --------- | - | ------ | ----------- |  | - | ----------- |  |  | ----- | ----- |  |  | - | ------- | 
|                             |  |            |         |  |           |   |        | Operating   |  |   |            
|                             |  | Debt       |         |  | Broadcast |   |        | Other       |  |   | Lease       |  |  |      
|12 Months Ending December 31 |  | Maturities |         |  | Rights    |   |        | Obligations |  |   | Obligations |  |  | Total |      
|                             |  |            |         |  |           |   |        |             |  |   |             |  |  |       |      
|2006                         |  | $          |         |  |           | $ | 17,478 |             |  | $ | 5,022       |  |  | $     | 1,007 |  |  | $ | 23,507  | 
|2007                         |  |            |         |  |           |   | 16,717 |             |  |   | 5,259       |  |  |       | 956   |  |  |   | 22,932  | 
|2008                         |  |            |         |  |           |   | 15,059 |             |  |   | 2,440       |  |  |       | 690   |  |  |   | 18,189  | 
|2009                         |  |            |         |  |           |   | 4,802  |             |  |   |             |  |  |       | 488   |  |  |   | 5,290   | 
|2010                         |  |            |         |  |           |   | 2,608  |             |  |   |             |  |  |       | 412   |  |  |   | 3,020   | 
|Thereafter                   |  |            | 150,000 |  |           |   | 398    |             |  |   |             |  |  |       | 2,425 |  |  |   | 152,823 | 
|                             |  |            |         |  |           |   |        |             |  |   |             |  |  |       |      
|                             |  | $          | 150,000 |  |           | $ | 57,062 |             |  | $ | 12,721      |  |  | $     | 5,978 |  |  | $ | 225,761 | 
|                             |  |            |         |  |           |   |        |             |  |   |             |  |  |       |      

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| |                                 
| | --------------------------------
| | Recent Accounting Pronouncements

D-108, D-108 D-108


 Stock-based compensation











|         |                                                                
|-------- | ---------------------------------------------------------------
|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISKS



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Interest Rate Exposure




Marketable Securities Exposure









|        |                                            
|------- | -------------------------------------------
|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE








|         |                        
|-------- | -----------------------
|ITEM 9A. | CONTROLS AND PROCEDURES

13a-15(e) 15d-15(e)






| |   |                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | On October 4, 2005, we announced the appointment of Colleen
    B. Brown as president and chief executive officer effective
    October 10, 2005, and that Benjamin W. Tucker, who had been
    our acting president and chief executive officer, would leave
    the Company in October 2005.
|
| |  | Effective October 2005, we implemented a new, centralized
    payroll and human resources system.                                                                                                                                                                                             

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| |   |                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | On December 7, 2005, we announced the appointment of Judith
    A. Endejan as Senior Vice President General Counsel, responsible
    for both legal and human resource affairs.

Managements Report on Internal Control Over Financial
Reporting


Internal Control  Integrated
Framework.











|         |                  
|-------- | -----------------
|ITEM 9B. | OTHER INFORMATION

Renewal of CBS Affiliation Agreements




non-duplication


Amended and Restated Supplemental Pension Plan




non-funded, non-qualified, non-contributory one-half


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PART III







|         |                                                   
|-------- | --------------------------------------------------
|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT








|         |                       
|-------- | ----------------------
|ITEM 11. | EXECUTIVE COMPENSATION








|         |                                                                   
|-------- | ------------------------------------------------------------------
|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT



Securities authorized for issuance under equity compensation
plans






|                                  |         |  |                           |   |       |                      |  |  |         | 
|--------------------------------- | ------- |  | ------------------------- | - | ----- | -------------------- |  |  | ------- | 
|Number of Securities to be Issued |         |  | Weighted Average Exercise |   |       | Number of Securities | 
|Upon Exercise of Outstanding      |         |  | Price of Outstanding      |   |       | Remaining Available  | 
|Options and Rights                |         |  | Options and Rights        |   |       | for Future Issuance  | 
|                                  |         |  |                           |   |       |                      | 
|                                  | 279,430 |  |                           | $ | 52.12 |                      |  |  | 356,100 | 






|         |                                               
|-------- | ----------------------------------------------
|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS








|         |                                       
|-------- | --------------------------------------
|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES



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PART IV







|         |                                           
|-------- | ------------------------------------------
|ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Consolidated Financial Statements:




| |   |                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------
| |  | Report of Independent Registered Public Accounting Firm                                                  
|
| |  | Consolidated Statements of Operations for the years ended
    December 31, 2005, 2004, and 2003          
|
| |  | Consolidated Balance Sheets at December 31, 2005 and 2004                                                
|
| |  | Consolidated Statements of Stockholders Equity for the
    years ended December 31, 2005, 2004, and 2003
|
| |  | Consolidated Statements of Cash Flows for the years ended
    December 31, 2005, 2004, and 2003          
|
| |  | Consolidated Statements of Comprehensive Income for the years
    ended December 31, 2005, 2004, and 2003
|
| |  | Notes to Consolidated Financial Statements                                                               

Financial Statement Schedules:




| |   |                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------
| |  | Schedule II  Valuation and Qualifying Accounts
    for the years ended December 31, 2005, 2004, and 2003

Exhibits:


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Report of Independent Registered Public Accounting Firm








Consolidated financial statements and financial statement
schedule




Internal control over financial reporting


10-K, Internal Control  Integrated
Framework Internal Control  Integrated
Framework




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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES







CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                                 |                                                                                                                                                                     |                                 |         |        |      |   |         |        |   |   |         |        |  
|---------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------- | ------- | ------ | ---- | - | ------- | ------ | - | - | ------- | ------ | -
|                                                                 |                                                                                                                                                                     | Year Ended December 31          |        
|                                                                 |                                                                                                                                                                     |                                 |        
|                                                                 |                                                                                                                                                                     | 2005                            |         |        | 2004 |   |         | 2003   |  
|                                                                 |                                                                                                                                                                     |                                 |         |        |      |   |         |        |  
|                                                                 |                                                                                                                                                                     | (In thousands, except per-share |        
|                                                                 |                                                                                                                                                                     | amounts)                        |        
|Revenue                                                          |                                                                                                                                                                     | $                               | 149,319 |        |      | $ | 153,866 |        |   | $ | 138,387 |       
|                                                                 |                                                                                                                                                                     |                                 |         |        |      |   |         |        |  
|Costs and expenses                                               |                                                                                                                                                                     |                                 |         |        |      |   |         |        |   |   |         |       
|                                                                 | Cost of services sold (exclusive of annual depreciation and
    amortization reported separately below, amounting to $10,965,
    $13,272 and $14,356 respectively) |                                 |         | 73,798 |      |   |         | 69,123 |   |   |         | 69,183 |  
|                                                                 | Selling expenses                                                                                                                                                    |                                 |         | 32,344 |      |   |         | 27,626 |   |   |         | 25,259 |  
|                                                                 | General and administrative expenses                                                                                                                                 |                                 |         | 34,074 |      |   |         | 34,682 |   |   |         | 39,829 |  
|                                                                 | Depreciation and amortization                                                                                                                                       |                                 |         | 13,085 |      |   |         | 16,017 |   |   |         | 16,180 |  
|                                                                 |                                                                                                                                                                     |                                 |         |        |      |   |         |        |  
|                                                                 |                                                                                                                                                                     |                                 | 153,301 |        |      |   | 147,448 |        |   |   | 150,451 |       
|                                                                 |                                                                                                                                                                     |                                 |         |        |      |   |         |        |  
|Income loss from operations                                      |                                                                                                                                                                     |                                 | (3,982  | )      |      |   | 6,418   |        |   |   | (12,064 | )     
|Net loss on derivative instruments                               |                                                                                                                                                                     |                                 |         |        |      |   | (12,656 | )      |   |   | (6,911  | )     
|Loss from extinguishment of long-term debt                       |                                                                                                                                                                     |                                 |         |        |      |   | (5,034  | )      |   |   | (2,204  | )     
|Other income, net                                                |                                                                                                                                                                     |                                 | 3,674   |        |      |   | 3,421   |        |   |   | 6,427   |       
|Interest expense, net                                            |                                                                                                                                                                     |                                 | (13,726 | )      |      |   | (11,776 | )      |   |   | (13,081 | )     
|                                                                 |                                                                                                                                                                     |                                 |         |        |      |   |         |        |  
|Loss from continuing operations before income taxes              |                                                                                                                                                                     |                                 | (14,034 | )      |      |   | (19,627 | )      |   |   | (27,833 | )     
|Benefit for federal and state income taxes                       |                                                                                                                                                                     |                                 | (8,962  | )      |      |   | (7,806  | )      |   |   | (13,029 | )     
|                                                                 |                                                                                                                                                                     |                                 |         |        |      |   |         |        |  
|Loss from continuing operations                                  |                                                                                                                                                                     |                                 | (5,072  | )      |      |   | (11,821 | )      |   |   | (14,804 | )     
|Income (loss) from discontinued operations, net of income taxes: |                                                                                                                                                                     |                                 |         |        |      |   |         |        |   |   |         |       
|                                                                 | Real estate operations                                                                                                                                              |                                 |         |        |      |   |         |        |   |   |         | 10,276 |  
|                                                                 | Property management business                                                                                                                                        |                                 |         |        |      |   |         |        |   |   |         | (831   | )
|                                                                 | Georgia television stations                                                                                                                                         |                                 |         |        |      |   |         | (132   | ) |   |         | 8,189  |  
|                                                                 | Portland radio stations                                                                                                                                             |                                 |         |        |      |   |         |        |   |   |         | 7,090  |  
|                                                                 | Media Services operations closed                                                                                                                                    |                                 |         |        |      |   |         |        |   |   |         | (1,692 | )
|                                                                 |                                                                                                                                                                     |                                 |         |        |      |   |         |        |  
|Income (loss) from discontinued operations, net of income taxes  |                                                                                                                                                                     |                                 |        |        |      |   | (132    | )      |   |   | 23,032  |       
|                                                                 |                                                                                                                                                                     |                                 |         |        |      |   |         |        |  
|Net income (loss)                                                |                                                                                                                                                                     | $                               | (5,072  | )      |      | $ | (11,953 | )      |   | $ | 8,228   |       
|                                                                 |                                                                                                                                                                     |                                 |         |        |      |   |         |        |  
|Income (loss) per share:                                         |                                                                                                                                                                     |                                 |         |        |      |   |         |        |   |   |         |       
|                                                                 | From continuing operations                                                                                                                                          |                                 | $       | (0.58  | )    |   | $       | (1.37  | ) |   | $       | (1.72  | )
|                                                                 | From discontinued operations                                                                                                                                        |                                 |         |        |      |   |         | (0.02  | ) |   |         | 2.68   |  
|                                                                 |                                                                                                                                                                     |                                 |         |        |      |   |         |        |  
|                                                                 | Net income (loss) per share                                                                                                                                         |                                 | $       | (0.58  | )    |   | $       | (1.39  | ) |   | $       | 0.96   |  
|                                                                 |                                                                                                                                                                     |                                 |         |        |      |   |         |        |  
|Income (loss) per share assuming dilution:                       |                                                                                                                                                                     |                                 |         |        |      |   |         |        |   |   |         |       
|                                                                 | From continuing operations                                                                                                                                          |                                 | $       | (0.58  | )    |   | $       | (1.37  | ) |   | $       | (1.72  | )
|                                                                 | From discontinued operations                                                                                                                                        |                                 |         |        |      |   |         | (0.02  | ) |   |         | 2.68   |  
|                                                                 |                                                                                                                                                                     |                                 |         |        |      |   |         |        |  
|                                                                 | Net income (loss) per share assuming dilution                                                                                                                       |                                 | $       | (0.58  | )    |   | $       | (1.39  | ) |   | $       | 0.96   |  
|                                                                 |                                                                                                                                                                     |                                 |         |        |      |   |         |        |  
|Weighted average shares outstanding                              |                                                                                                                                                                     |                                 | 8,678   |        |      |   | 8,617   |        |   |   | 8,599   |       
|Weighted average shares outstanding assuming dilution            |                                                                                                                                                                     |                                 | 8,678   |        |      |   | 8,617   |        |   |   | 8,599   |       



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


|                                                     |                                                                                                                 |                                          |                           |        |             |        |         |        |         |        | 
|---------------------------------------------------- | --------------------------------------------------------------------------------------------------------------- | ---------------------------------------- | ------------------------- | ------ | ----------- | ------ | ------- | ------ | ------- | ------ | 
|                                                     |                                                                                                                 | December 31                              |                           |        | December 31 |       
|                                                     |                                                                                                                 | 2005                                     |                           |        | 2004        |       
|                                                     |                                                                                                                 |                                          |                           |        |             |       
|                                                     |                                                                                                                 | (In thousands, except share              |                          
|                                                     |                                                                                                                 | and per-share amounts)                   |                          
|ASSETS                                              
|Current Assets                                       |                                                                                                                 |                                          |                           |        |             |        |         |       
|                                                     | Cash and cash equivalents                                                                                       |                                          | $                         | 19,622 |             |        | $       | 16,025 |        
|                                                     | Receivables, net                                                                                                |                                          |                           | 28,166 |             |        |         | 28,539 |        
|                                                     | Income taxes receivable                                                                                         |                                          |                           | 986    |             |        |         | 3,355  |        
|                                                     | Deferred income taxes                                                                                           |                                          |                           | 665    |             |        |         | 631    |        
|                                                     | Prepaid expenses                                                                                                |                                          |                           | 4,295  |             |        |         | 3,653  |        
|                                                     | Television and radio broadcast rights                                                                           |                                          |                           | 6,519  |             |        |         | 8,398  |        
|                                                     |                                                                                                                 |                                          |                           |        |             |       
|                                                     |                                                                                                                 |                                          | Total current assets      |        |             | 60,253 |         |        |         | 60,601 | 
|Marketable securities, at market value               |                                                                                                                 |                                          | 170,053                   |        |             |        | 157,102 |       
|Cash value of life insurance and retirement deposits |                                                                                                                 |                                          | 15,303                    |        |             |        | 14,971  |       
|Television and radio broadcast rights                |                                                                                                                 |                                          | 2,075                     |        |             |        | 3,086   |       
|Goodwill, net                                        |                                                                                                                 |                                          | 38,354                    |        |             |        | 38,354  |       
|Intangible assets                                    |                                                                                                                 |                                          | 1,244                     |        |             |        | 1,244   |       
|Investment in equity investee                        |                                                                                                                 |                                          | 2,759                     |        |             |        | 2,825   |       
|Prepaid financing fees and other assets              |                                                                                                                 |                                          | 6,040                     |        |             |        | 7,396   |       
|Property, plant and equipment, net                   |                                                                                                                 |                                          | 144,312                   |        |             |        | 150,293 |       
|                                                     |                                                                                                                 |                                          |                           |        |             |       
|Total Assets                                         |                                                                                                                 | $                                        | 440,393                   |        |             | $      | 435,872 |       
|                                                     |                                                                                                                 |                                          |                           |        |             |       
|                                                    
|LIABILITIES AND STOCKHOLDERS EQUITY                
|Current Liabilities                                  |                                                                                                                 |                                          |                           |        |             |        |         |       
|                                                     | Notes payable                                                                                                   |                                          | $                         |       |             |        | $       | 53     |        
|                                                     | Trade accounts payable                                                                                          |                                          |                           | 3,483  |             |        |         | 3,755  |        
|                                                     | Accrued payroll and related benefits                                                                            |                                          |                           | 7,355  |             |        |         | 7,331  |        
|                                                     | Interest payable                                                                                                |                                          |                           | 3,809  |             |        |         | 3,630  |        
|                                                     | Television and radio broadcast rights payable                                                                   |                                          |                           | 5,524  |             |        |         | 7,419  |        
|                                                     | Other current liabilities                                                                                       |                                          |                           | 4,520  |             |        |         | 5,232  |        
|                                                     |                                                                                                                 |                                          |                           |        |             |       
|                                                     |                                                                                                                 |                                          | Total current liabilities |        |             | 24,691 |         |        |         | 27,420 | 
|Long-term debt                                       |                                                                                                                 |                                          | 150,000                   |        |             |        | 150,000 |       
|Accrued retirement benefits                          |                                                                                                                 |                                          | 19,644                    |        |             |        | 18,967  |       
|Deferred income taxes                                |                                                                                                                 |                                          | 31,381                    |        |             |        | 36,133  |       
|Other liabilities                                    |                                                                                                                 |                                          | 5,056                     |        |             |        | 899     |       
|Commitments and Contingencies                        |                                                                                                                 |                                          |                           |        |             |        |         |       
|Stockholders Equity                                 |                                                                                                                 |                                          |                           |        |             |        |         |       
|                                                     | Common stock, shares authorized 12,000,000, $1.25 par
    value; issued 8,705,041 in 2005 and 8,618,781 in 2004 |                                          |                           | 10,881 |             |        |         | 10,773 |        
|                                                     | Capital in excess of par                                                                                        |                                          |                           | 8,590  |             |        |         | 4,535  |        
|                                                     | Deferred compensation                                                                                           |                                          |                           | (159   | )           |        |         |        |        
|                                                     | Accumulated other comprehensive income  net of income
    taxes:                                               |                                          |                           |        |             |        |         |        |        
|                                                     |                                                                                                                 | Unrealized gain on marketable securities |                           |        | 109,600     |        |         |        | 101,400 |       
|                                                     |                                                                                                                 | Minimum pension liability                |                           |        | (2,172      | )      |         |        | (2,208  | )     
|                                                     | Retained earnings                                                                                               |                                          |                           | 82,881 |             |        |         | 87,953 |        
|                                                     |                                                                                                                 |                                          |                           |        |             |       
|Total Stockholders Equity                           |                                                                                                                 |                                          | 209,621                   |        |             |        | 202,453 |       
|                                                     |                                                                                                                 |                                          |                           |        |             |       
|Total Liabilities and Stockholders Equity           |                                                                                                                 | $                                        | 440,393                   |        |             | $      | 435,872 |       
|                                                     |                                                                                                                 |                                          |                           |        |             |       



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY


|                          |                                                                                |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      |      |          |   |         |        |  |   |        |         |   |   |         |         |  
|------------------------- | ------------------------------------------------------------------------------ | ----------------------------------- | --------- | ------ | ---------- | - | ------ | ----------- |  | ----- | ------------- | ----- |  | -------- | ---- | ---- | -------- | - | ------- | ------ |  | - | ------ | ------- | - | - | ------- | ------- | -
|                          |                                                                                |                                     |           |        |            |   |        | Accumulated |  |       |               |       | 
|                          |                                                                                | Common Stock                        |           |        | Capital in |   |        |             |  | Other |               |       |  |          |     
|                          |                                                                                |                                     |           |        | Excess of  |   |        | Deferred    |  |       | Comprehensive |       |  | Retained |      |      | Total    |  
|                          |                                                                                | Shares                              |           |        | Amount     |   |        | Par         |  |       | Compensation  |       |  | Income   |      |      | Earnings |   |         | Equity | 
|                          |                                                                                |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      |      |          |   |         |        | 
|                          |                                                                                | (In thousands except share amounts) |          
|Balance December 31, 2002 |                                                                                |                                     | 8,594,060 |        |            | $ | 10,743 |             |  | $     | 3,488         |       |  | $        | (11  | )    |          | $ | 66,837  |        |  | $ | 91,678 |         |   | $ | 172,735 |        
|                          | Net income                                                                     |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      |      |          |   |         |        |  |   |        | 8,228   |   |   |         | 8,228   |  
|                          | Other comprehensive income                                                     |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      |      |          |   |         | 6,252  |  |   |        |         |   |   |         | 6,252   |  
|                          | Amortization of deferred compensation                                          |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      | 9    |          |   |         |        |  |   |        |         |   |   |         | 9       |  
|                          | Compensation expense for accelerated option vesting                            |                                     |           |        |            |   |        |             |  |       |               | 90    |  |          |      |      |          |   |         |        |  |   |        |         |   |   |         | 90      |  
|                          | Issuance of common stock under rights and options, and related
    tax benefit |                                     |           | 14,228 |            |   |        | 17          |  |       |               | 473   |  |          |      |      |          |   |         |        |  |   |        |         |   |   |         | 490     |  
|                          |                                                                                |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      |      |          |   |         |        | 
|Balance December 31, 2003 |                                                                                |                                     | 8,608,288 |        |            |   | 10,760 |             |  |       | 4,051         |       |  |          | (2   | )    |          |   | 73,089  |        |  |   | 99,906 |         |   |   | 187,804 |        
|                          | Net loss                                                                       |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      |      |          |   |         |        |  |   |        | (11,953 | ) |   |         | (11,953 | )
|                          | Other comprehensive income                                                     |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      |      |          |   |         | 26,103 |  |   |        |         |   |   |         | 26,103  |  
|                          | Amortization of deferred compensation                                          |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      | 2    |          |   |         |        |  |   |        |         |   |   |         | 2       |  
|                          | Compensation expense for accelerated option vesting                            |                                     |           |        |            |   |        |             |  |       |               | 41    |  |          |      |      |          |   |         |        |  |   |        |         |   |   |         | 41      |  
|                          | Issuance of common stock under rights and options, and related
    tax benefit |                                     |           | 10,493 |            |   |        | 13          |  |       |               | 443   |  |          |      |      |          |   |         |        |  |   |        |         |   |   |         | 456     |  
|                          |                                                                                |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      |      |          |   |         |        | 
|Balance December 31, 2004 |                                                                                |                                     | 8,618,781 |        |            |   | 10,773 |             |  |       | 4,535         |       |  |          |     |      |          |   | 99,192  |        |  |   | 87,953 |         |   |   | 202,453 |        
|                          | Net loss                                                                       |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      |      |          |   |         |        |  |   |        | (5,072  | ) |   |         | (5,072  | )
|                          | Other comprehensive income                                                     |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      |      |          |   |         | 8,236  |  |   |        |         |   |   |         | 8,236   |  
|                          | Issuance of common stock rights                                                |                                     |           |        |            |   |        |             |  |       |               | 188   |  |          |      | (188 | )        |   |         |        |  |   |        |         |   |   |         |        |  
|                          | Amortization of deferred compensation                                          |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      | 29   |          |   |         |        |  |   |        |         |   |   |         | 29      |  
|                          | Compensation expense for accelerated option vesting                            |                                     |           |        |            |   |        |             |  |       |               | 340   |  |          |      |      |          |   |         |        |  |   |        |         |   |   |         | 340     |  
|                          | Issuance of common stock under rights and options, and related
    tax benefit |                                     |           | 86,260 |            |   |        | 108         |  |       |               | 3,527 |  |          |      |      |          |   |         |        |  |   |        |         |   |   |         | 3,635   |  
|                          |                                                                                |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      |      |          |   |         |        | 
|Balance December 31, 2005 |                                                                                |                                     | 8,705,041 |        |            | $ | 10,881 |             |  | $     | 8,590         |       |  | $        | (159 | )    |          | $ | 107,428 |        |  | $ | 82,881 |         |   | $ | 209,621 |        
|                          |                                                                                |                                     |           |        |            |   |        |             |  |       |               |       |  |          |      |      |          |   |         |        | 



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                     |                                                                                                                   |                                                     |                                                       |        |        |         |        |          |        |         |         |          |          |         |  
|---------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ----------------------------------------------------- | ------ | ------ | ------- | ------ | -------- | ------ | ------- | ------- | -------- | -------- | ------- | -
|                                                     |                                                                                                                   | Year Ended December 31                              |                                                      
|                                                     |                                                                                                                   |                                                     |                                                      
|                                                     |                                                                                                                   | 2005                                                |                                                       |        | 2004   |         |        | 2003     |       
|                                                     |                                                                                                                   |                                                     |                                                       |        |        |         |        |          |       
|                                                     |                                                                                                                   | (In thousands)                                      |                                                      
|Cash flows from operating activities                 |                                                                                                                   |                                                     |                                                       |        |        |         |        |          |        |         |         |         
|                                                     | Net income (loss)                                                                                                 |                                                     | $                                                     | (5,072 | )      |         | $      | (11,953  | )      |         | $       | 8,228    |         
|                                                     | Adjustments to reconcile net income (loss) to net cash provided
    by operating activities                       |                                                     |                                                       |        |        |         |        |          |        |         |         |          |         
|                                                     |                                                                                                                   |                                                     | Depreciation and amortization                         |        |        | 13,085  |        |          |        | 16,017  |         |          |          | 18,801  |  
|                                                     |                                                                                                                   |                                                     | Deferred income taxes                                 |        |        | (8,991  | )      |          |        | (4,578  | )       |          |          | (5,470  | )
|                                                     |                                                                                                                   |                                                     | Equity in operations of equity investees              |        |        | (46     | )      |          |        | (139    | )       |          |          | (27     | )
|                                                     |                                                                                                                   |                                                     | Amortization of deferred loan costs                   |        |        | 646     |        |          |        | 742     |         |          |          | 1,376   |  
|                                                     |                                                                                                                   |                                                     | Decrease in fair value of derivative instruments      |        |        |         |        |          |        | 12,656  |         |          |          | 6,911   |  
|                                                     |                                                                                                                   |                                                     | Interest accrued on forward sale transaction          |        |        |         |        |          |        | 3,564   |         |          |          | 5,039   |  
|                                                     |                                                                                                                   |                                                     | Gain on sale of marketable securities                 |        |        |         |        |          |        |         |         |          |          | (3,675  | )
|                                                     |                                                                                                                   |                                                     | Loss from extinguishment of long-term debt            |        |        |         |        |          |        | 5,034   |         |          |          | 2,204   |  
|                                                     |                                                                                                                   |                                                     | Amortization of television and radio broadcast rights |        |        | 19,959  |        |          |        | 19,227  |         |          |          | 19,498  |  
|                                                     |                                                                                                                   |                                                     | Payments for television and radio broadcast rights    |        |        | (18,953 | )      |          |        | (18,524 | )       |          |          | (18,078 | )
|                                                     |                                                                                                                   |                                                     | Gain on sale of Georgia television stations           |        |        |         |        |          |        |         |         |          |          | (12,460 | )
|                                                     |                                                                                                                   |                                                     | Gain on sale of Portland radio stations               |        |        |         |        |          |        |         |         |          |          | (12,616 | )
|                                                     |                                                                                                                   |                                                     | Gain on sale of commercial property                   |        |        |         |        |          |        |         |         |          |          | (16,724 | )
|                                                     |                                                                                                                   |                                                     | Loss on sale of property management business          |        |        |         |        |          |        |         |         |          |          | 215     |  
|                                                     |                                                                                                                   |                                                     | Gain on sales of other real estate properties         |        |        |         |        |          |        |         |         |          |          | (1,555  | )
|                                                     |                                                                                                                   |                                                     | Dividends from equity investee                        |        |        | 112     |        |          |        | 138     |         |          |          | 125     |  
|                                                     |                                                                                                                   |                                                     | Other                                                 |        |        | 229     |        |          |        | 245     |         |          |          | 134     |  
|Change in operating assets and liabilities           |                                                                                                                   |                                                     |                                                       |        |        |         |        |          |        |         |         |         
|                                                     | Receivables                                                                                                       |                                                     |                                                       | (573   | )      |         |        | (319     | )      |         |         | 3,235    |         
|                                                     | Prepaid expenses                                                                                                  |                                                     |                                                       | (642   | )      |         |        | 502      |        |         |         | 2,323    |         
|                                                     | Cash value of life insurance and retirement deposits                                                              |                                                     |                                                       | (332   | )      |         |        | (278     | )      |         |         | (817     | )       
|                                                     | Other assets                                                                                                      |                                                     |                                                       | (260   | )      |         |        | 834      |        |         |         | (33      | )       
|                                                     | Trade accounts payable, accrued payroll and related benefits,
    interest payable, and other current liabilities |                                                     |                                                       | (781   | )      |         |        | 3,294    |        |         |         | 569      |         
|                                                     | Income taxes receivable and payable                                                                               |                                                     |                                                       | 2,369  |        |         |        | (7,060   | )      |         |         | 9,711    |         
|                                                     | Accrued retirement benefits                                                                                       |                                                     |                                                       | 677    |        |         |        | 274      |        |         |         | (399     | )       
|                                                     | Other liabilities                                                                                                 |                                                     |                                                       | 4,146  |        |         |        | (586     | )      |         |         | (231     | )       
|                                                     |                                                                                                                   |                                                     |                                                       |        |        |         |        |          |       
|                                                     |                                                                                                                   | Net cash provided by operating activities           |                                                       |        | 5,573  |         |        |          | 19,090 |         |         |          | 6,284    |        
|                                                     |                                                                                                                   |                                                     |                                                       |        |        |         |        |          |       
|Cash flows from investing activities                 |                                                                                                                   |                                                     |                                                       |        |        |         |        |          |        |         |         |         
|                                                     | Proceeds from collection of notes receivable                                                                      |                                                     |                                                       | 1,585  |        |         |        | 428      |        |         |         | 3,235    |         
|                                                     | Proceeds from sale of marketable securities                                                                       |                                                     |                                                       | 247    |        |         |        |          |        |         |         | 5,169    |         
|                                                     | Proceeds from sale of Georgia television stations                                                                 |                                                     |                                                       |        |        |         |        |          |        |         |         | 40,725   |         
|                                                     | Proceeds from sale of Portland radio stations                                                                     |                                                     |                                                       |        |        |         |        |          |        |         |         | 42,033   |         
|                                                     | Proceeds from sale of commercial property and property, plant
    and equipment                                   |                                                     |                                                       | 418    |        |         |        | 112      |        |         |         | 61,050   |         
|                                                     | Restricted cash                                                                                                   |                                                     |                                                       |        |        |         |        |          |        |         |         | 12,778   |         
|                                                     | Purchase of property, plant and equipment                                                                         |                                                     |                                                       | (7,523 | )      |         |        | (6,791   | )      |         |         | (12,413  | )       
|                                                     | Purchase of radio station licenses                                                                                |                                                     |                                                       |        |        |         |        | (204     | )      |         |         | (468     | )       
|                                                     |                                                                                                                   |                                                     |                                                       |        |        |         |        |          |       
|                                                     |                                                                                                                   | Net cash provided by (used in) investing activities |                                                       |        | (5,273 | )       |        |          | (6,455 | )       |         |          | 152,109  |        
|                                                     |                                                                                                                   |                                                     |                                                       |        |        |         |        |          |       
|Cash flows from financing activities                 |                                                                                                                   |                                                     |                                                       |        |        |         |        |          |        |         |         |         
|                                                     | Net payments under notes payable                                                                                  |                                                     |                                                       | (53    | )      |         |        | (662     | )      |         |         | (122     | )       
|                                                     | Borrowings under borrowing agreements                                                                             |                                                     |                                                       |        |        |         |        | 161,000  |        |         |         |          |         
|                                                     | Payments on borrowing agreements and mortgage loans                                                               |                                                     |                                                       |        |        |         |        | (142,709 | )      |         |         | (168,667 | )       
|                                                     | Payments to terminate forward transaction tranche and
    additional amount to retire outstanding balances        |                                                     |                                                       |        |        |         |        | (21,589  | )      |         |         |          |         
|                                                     | Payment of deferred loan costs                                                                                    |                                                     |                                                       | (87    | )      |         |        | (6,074   | )      |         |         | (613     | )       
|                                                     | Proceeds from exercise of stock options                                                                           |                                                     |                                                       | 3,437  |        |         |        | 428      |        |         |         | 490      |         
|                                                     |                                                                                                                   |                                                     |                                                       |        |        |         |        |          |       
|                                                     |                                                                                                                   | Net cash provided by (used in) financing activities |                                                       |        | 3,297  |         |        |          | (9,606 | )       |         |          | (168,912 | )      
|                                                     |                                                                                                                   |                                                     |                                                       |        |        |         |        |          |       
|Net increase (decrease) in cash and cash equivalents |                                                                                                                   |                                                     | 3,597                                                 |        |        |         | 3,029  |          |        |         | (10,519 | )       
|Cash and cash equivalents, beginning of period       |                                                                                                                   |                                                     | 16,025                                                |        |        |         | 12,996 |          |        |         | 23,515  |         
|                                                     |                                                                                                                   |                                                     |                                                       |        |        |         |        |          |       
|Cash and cash equivalents, end of period             |                                                                                                                   | $                                                   | 19,622                                                |        |        | $       | 16,025 |          |        | $       | 12,996  |         
|                                                     |                                                                                                                   |                                                     |                                                       |        |        |         |        |          |       



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES







CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


|                            |                                                                        |                        |        |        |        |   |         |        |         |   |        |        |        |  
|--------------------------- | ---------------------------------------------------------------------- | ---------------------- | ------ | ------ | ------ | - | ------- | ------ | ------- | - | ------ | ------ | ------ | -
|                            |                                                                        | Year Ended December 31 |       
|                            |                                                                        |                        |       
|                            |                                                                        | 2005                   |        |        | 2004   |   |         | 2003   |        
|                            |                                                                        |                        |        |        |        |   |         |        |        
|                            |                                                                        | (In thousands)         |       
|Net income(loss)            |                                                                        | $                      | (5,072 | )      |        | $ | (11,953 | )      |         | $ | 8,228  |       
|Other comprehensive income: |                                                                        |                        |        |        |        |   |         |        |         |   |        |       
|                            | Unrealized gain on marketable securities                               |                        |        | 12,779 |        |   |         | 40,136 |         |   |        | 12,793 |       
|                            |                                                                        | Effect of income taxes |        |        | (4,473 | ) |         |        | (14,048 | ) |        |        | (4,477 | )
|                            | Minimum pension liability                                              |                        |        | 56     |        |   |         | 23     |         |   |        | (63    | )     
|                            |                                                                        | Effect of income taxes |        |        | (20    | ) |         |        | (8      | ) |        |        | 23     |  
|                            | Reclassification adjustment for gains included in net
    income(loss) |                        |        | (163   | )      |   |         |        |         |   |        | (3,114 | )     
|                            |                                                                        | Effect of income taxes |        |        | 57     |   |         |        |         |   |        |        | 1,090  |  
|                            |                                                                        |                        |        |        |        |   |         |        |        
|                            |                                                                        |                        | 8,236  |        |        |   | 26,103  |        |         |   | 6,252  |       
|                            |                                                                        |                        |        |        |        |   |         |        |        
|Comprehensive income        |                                                                        | $                      | 3,164  |        |        | $ | 14,150  |        |         | $ | 14,480 |       
|                            |                                                                        |                        |        |        |        |   |         |        |        



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1


Operations and Accounting Policies




Principles of consolidation


Estimates


Television and radio broadcast licenses


Revenue recognition


Termination of national advertising representation firms


Short-term cash investments


Marketable securities


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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Concentration of credit risk


Television and radio broadcast rights


Investments in equity investees


Goodwill and indefinite-lived intangible assets




Property, plant and equipment


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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|                           |  |  |             | 
|-------------------------- |  |  | ----------- | 
|Buildings and improvements |  |  | 5-55 years  | 
|Machinery and equipment    |  |  | 3-25 years  | 
|Land improvements          |  |  | 10-55 years | 

Tangible Long-Lived Assets




Fair value of financial instruments




Deferred financing costs 10-year 6-year


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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Advertising


Operating leases


Income taxes


Earnings per share




|                                                      |  |      |        |   |      |   |         |      |  |   |       | 
|----------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------- | ---- |  | - | ----- | 
|Year Ended December 31                                |  | 2005 |        |   | 2004 |   |         | 2003 | 
|                                                      |  |      |        |   |      |   |         |      | 
|Net income (loss)                                     |  | $    | (5,072 | ) |      | $ | (11,953 | )    |  | $ | 8,228 | 
|Weighted average shares outstanding  basic           |  |      | 8,678  |   |      |   | 8,617   |      |  |   | 8,599 | 
|Weighted effect of dilutive options and rights        |  |      |       |   |      |   |        |      |  |   |      | 
|                                                      |  |      |        |   |      |   |         |      | 
|Weighted average shares outstanding assuming dilution |  |      | 8,678  |   |      |   | 8,617   |      |  |   | 8,599 | 
|                                                      |  |      |        |   |      |   |         |      | 
|Basic and diluted net income (loss) per share         |  | $    | (0.58  | ) |      | $ | (1.39   | )    |  | $ | 0.96  | 
|                                                      |  |      |        |   |      |   |         |      | 



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Stock-based compensation


|                                                                                                                                                             |             |      |        |       |      |   |         |       |   |   |       |      | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------- | ---- | ------ | ----- | ---- | - | ------- | ----- | - | - | ----- | ---- | 
|Year Ended December 31                                                                                                                                       |             | 2005 |        |       | 2004 |   |         | 2003  |  
|                                                                                                                                                             |             |      |        |       |      |   |         |       |  
|Net income (loss), as reported                                                                                                                               |             | $    | (5,072 | )     |      | $ | (11,953 | )     |   | $ | 8,228 |     
|Add stock-based employee compensation expense included in net
    income (loss) as reported, net of related income taxes                                     |             |      | 221    |       |      |   | 41      |       |   |   | 90    |     
|Deduct total stock-based employee compensation expense
    determined under the fair value based method for all awards, net
    of related income tax effect |             |      | (1     | )     |      |   | (1,090  | )     |   |   | (134  | )   
|                                                                                                                                                             |             |      |        |       |      |   |         |       |  
|Adjusted net income (loss)                                                                                                                                   |             | $    | (4,852 | )     |      | $ | (13,002 | )     |   | $ | 8,184 |     
|                                                                                                                                                             |             |      |        |       |      |   |         |       |  
|Income (loss) per share:                                                                                                                                     |             |      |        |       |      |   |         |       |   |   |       |     
|                                                                                                                                                             | As reported |      | $      | (0.58 | )    |   | $       | (1.39 | ) |   | $     | 0.96 | 
|                                                                                                                                                             | Adjusted    |      | $      | (0.56 | )    |   | $       | (1.51 | ) |   | $     | 0.95 | 
|Income (loss) per share assuming dilution:                                                                                                                   |             |      |        |       |      |   |         |       |   |   |       |     
|                                                                                                                                                             | As reported |      | $      | (0.58 | )    |   | $       | (1.39 | ) |   | $     | 0.96 | 
|                                                                                                                                                             | Adjusted    |      | $      | (0.56 | )    |   | $       | (1.51 | ) |   | $     | 0.95 | 



| |                                 
| | --------------------------------
| | Recent accounting pronouncements

D-108, D-108 D-108


Stock-based compensation




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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






NOTE 2


Discontinued Operations




WFXG-TV, WXTX-TV,










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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                            |                                          |      |        |        |  
|------------------------------------------- | ---------------------------------------- | ---- | ------ | ------ | -
|Year Ended December 31                      |                                          | 2003 |       
|                                            |                                          |      |       
|Revenue                                     |                                          | $    | 5,120  |       
|Income (loss) from discontinued operations: |                                          |      |        |       
|                                            | Discontinued operating activities        |      | $      | (33    | )
|                                            | Gain on sale                             |      |        | 16,724 |  
|                                            |                                          |      |       
|                                            |                                          |      | 16,691 |       
|                                            | Income tax effect                        |      |        | (6,059 | )
|                                            |                                          |      |       
|                                            |                                          |      | 10,632 |       
|                                            | Interest allocation, net of income taxes |      |        | (356   | )
|                                            |                                          |      |       
|Income from discontinued properties         |                                          | $    | 10,276 |       
|                                            |                                          |      |       





|                                                      |                                   |      |      |      |  
|----------------------------------------------------- | --------------------------------- | ---- | ---- | ---- | -
|Year Ended December 31                                |                                   | 2003 |     
|                                                      |                                   |      |     
|Revenue                                               |                                   | $    | 502  |     
|Loss from discontinued operations:                    |                                   |      |      |     
|                                                      | Discontinued operating activities |      | $    | (513 | )
|                                                      | Loss on sale                      |      |      | (215 | )
|                                                      |                                   |      |     
|                                                      |                                   |      | (728 | )   
|                                                      | Income tax effect                 |      |      | (103 | )
|                                                      |                                   |      |     
|Loss from discontinued property management operations |                                   | $    | (831 | )   
|                                                      |                                   |      |     



|                                                            |                                          |      |      |      |      |   |        |        |  
|----------------------------------------------------------- | ---------------------------------------- | ---- | ---- | ---- | ---- | - | ------ | ------ | -
|Year Ended December 31                                      |                                          | 2004 |      |      | 2003 |  
|                                                            |                                          |      |      |      |      |  
|Revenue                                                     |                                          | $    |      |      |      | $ | 7,805  |       
|Income (loss) from discontinued operations:                 |                                          |      |      |      |      |   |        |       
|                                                            | Discontinued operating activities        |      | $    | (207 | )    |   | $      | 2,292  |  
|                                                            | Gain on sale                             |      |      |      |      |   |        | 12,460 |  
|                                                            |                                          |      |      |      |      |  
|                                                            |                                          |      | (207 | )    |      |   | 14,752 |       
|                                                            | Income tax effect                        |      |      | 75   |      |   |        | (5,248 | )
|                                                            |                                          |      |      |      |      |  
|                                                            |                                          |      | (132 | )    |      |   | 9,504  |       
|                                                            | Interest allocation, net of income taxes |      |      |      |      |   |        | (1,315 | )
|                                                            |                                          |      |      |      |      |  
|Income (loss) from discontinued Georgia television stations |                                          | $    | (132 | )    |      | $ | 8,189  |       
|                                                            |                                          |      |      |      |      |  



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                 |                                          |      |        |        |  
|------------------------------------------------ | ---------------------------------------- | ---- | ------ | ------ | -
|Year Ended December 31                           |                                          | 2003 |       
|                                                 |                                          |      |       
|Revenue                                          |                                          | $    | 2,474  |       
|Income from discontinued operations:             |                                          |      |        |       
|                                                 | Discontinued operating activities        |      | $      | 338    |  
|                                                 | Gain on sale                             |      |        | 12,616 |  
|                                                 |                                          |      |       
|                                                 |                                          |      | 12,954 |       
|                                                 | Income tax effect                        |      |        | (4,702 | )
|                                                 |                                          |      |       
|                                                 |                                          |      | 8,252  |       
|                                                 | Interest allocation, net of income taxes |      |        | (1,162 | )
|                                                 |                                          |      |       
|Income from discontinued Portland radio stations |                                          | $    | 7,090  |       
|                                                 |                                          |      |       









|                                        |                                   |      |        |        |  
|--------------------------------------- | --------------------------------- | ---- | ------ | ------ | -
|Year Ended December 31                  |                                   | 2003 |       
|                                        |                                   |      |       
|Revenue                                 |                                   | $    | 1,557  |       
|Loss from discontinued operations:      |                                   |      |        |       
|                                        | Discontinued operating activities |      | $      | (2,426 | )
|                                        | Income tax effect                 |      |        | 734    |  
|                                        |                                   |      |       
|Loss from discontinued media businesses |                                   | $    | (1,692 | )     
|                                        |                                   |      |       

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


NOTE 3


Receivables




|                                     |                   |      |        |        |      |   |        |        | 
|------------------------------------ | ----------------- | ---- | ------ | ------ | ---- | - | ------ | ------ | 
|December 31                          |                   | 2005 |        |        | 2004 |  
|                                     |                   |      |        |        |      |  
|Trade accounts                       |                   | $    | 27,273 |        |      | $ | 25,606 |       
|Other                                |                   |      | 1,396  |        |      |   | 3,584  |       
|                                     |                   |      |        |        |      |  
|                                     |                   |      | 28,669 |        |      |   | 29,190 |       
|Less-Allowance for doubtful accounts |                   |      | 503    |        |      |   | 651    |       
|                                     |                   |      |        |        |      |  
|                                     | Total receivables |      | $      | 28,166 |      |   | $      | 28,539 | 
|                                     |                   |      |        |        |      |  



NOTE 4


Investments in Equity
Investee








|                           |  |   |       |  
|-------------------------- |  | - | ----- | -
|Balance, December 31, 2002 |  | $ | 2,922 |  
|Dividends                  |  |   | (125  | )
|Equity in net income       |  |   | 27    |  
|                           |  |   |      
|Balance, December 31, 2003 |  |   | 2,824 |  
|Dividends                  |  |   | (138  | )
|Equity in net income       |  |   | 139   |  
|                           |  |   |      
|Balance, December 31, 2004 |  |   | 2,825 |  
|Dividends                  |  |   | (112  | )
|Equity in net income       |  |   | 46    |  
|                           |  |   |      
|Balance, December 31, 2005 |  | $ | 2,759 |  
|                           |  |   |      

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


NOTE 5


Goodwill and Intangible
Assets








NOTE 6


Property, Plant and
Equipment




|                              |  |      |         |  |      |   |         | 
|----------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|December 31                   |  | 2005 |         |  | 2004 |  
|                              |  |      |         |  |      |  
|Building and improvements     |  | $    | 132,869 |  |      | $ | 130,384 | 
|Machinery and equipment       |  |      | 103,448 |  |      |   | 113,671 | 
|Land and improvements         |  |      | 8,233   |  |      |   | 8,470   | 
|                              |  |      |         |  |      |  
|                              |  |      | 244,550 |  |      |   | 252,525 | 
|Less-Accumulated depreciation |  |      | 100,238 |  |      |   | 102,232 | 
|                              |  |      |         |  |      |  
|Total                         |  | $    | 144,312 |  |      | $ | 150,293 | 
|                              |  |      |         |  |      |  



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|           |  |         |        | 
|---------- |  | ------- | ------ | 
|Year       |  | Rentals |       
|           |  |         |       
|2006       |  | $       | 2,124  | 
|2007       |  |         | 2,024  | 
|2008       |  |         | 1,954  | 
|2009       |  |         | 1,326  | 
|2010       |  |         | 1,028  | 
|Thereafter |  |         | 3,331  | 
|           |  |         |       
|           |  | $       | 11,787 | 
|           |  |         |       



NOTE 7




| |                                                              
| | -------------------------------------------------------------
| | Notes Payable, Long Term Debt, and Derivative
    Instruments



| |              
| | -------------
| | Notes payable





| |                                        
| | ---------------------------------------
| | Long-term debt and borrowing agreements





|                    |  |            |          |  
|------------------- |  | ---------- | -------- | -
|Year                |  | Percentage |         
|                    |  |            |         
|2009                |  |            | 104.3125 | %
|2010                |  |            | 102.8750 | %
|2011                |  |            | 101.4375 | %
|2012 and thereafter |  |            | 100.0000 | %

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |   |                                                                                       
| | - | --------------------------------------------------------------------------------------
| |  | incur additional indebtedness;                                                        
|
| |  | make certain asset dispositions;                                                      
|
| |  | make investments or other restricted payments;                                        
|
| |  | pay dividends or make other distributions on, redeem or
    repurchase, capital stock;
|
| |  | issue capital stock of our restricted subsidiaries;                                   
|
| |  | enter into transactions with affiliates or related persons;                           
|
| |  | incur certain liens on assets to secure debt; and                                     
|
| |  | enter into a merger, sale or consolidation.                                           











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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                       
| | ----------------------
| | Derivative Instruments











| |                
| | ---------------
| | Debt Maturities



|           |  |   |         | 
|---------- |  | - | ------- | 
|2006       |  | $ |         | 
|2007       |  |   |         | 
|2008       |  |   |         | 
|2009       |  |   |         | 
|2010       |  |   |         | 
|Thereafter |  |   | 150,000 | 
|           |  |   |        
|           |  | $ | 150,000 | 
|           |  |   |        



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


NOTE 8




| |                                                                          
| | -------------------------------------------------------------------------
| | Television and Radio Broadcast Rights and Other Broadcast
    Commitments







NOTE 9




| |                     
| | --------------------
| | Stockholders Equity



Stock options


Restricted stock rights


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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                           |                                    |               |         |            |                  |   |       |           |  |  |       |       |  
|-------------------------- | ---------------------------------- | ------------- | ------- | ---------- | ---------------- | - | ----- | --------- |  |  | ----- | ----- | -
|                           |                                    |               |         | Restricted |                 
|                           |                                    | Stock Options |         |            | Stock Rights     |  
|                           |                                    |               |         |            |                  |  
|                           |                                    |               |         | Weighted   |                  |   |      
|                           |                                    | Number of     |         |            | Average Exercise |   |       | Number of | 
|                           |                                    | Shares        |         |            | Price Per Share  |   |       | Shares    | 
|                           |                                    |               |         |            |                  |   |       |           | 
|Balance, December 31, 2002 |                                    |               | 422,798 |            |                  | $ | 53.88 |           |  |  | 1,504 |      
|                           | Options granted                    |               |         | 77,300     |                  |   |       | 46.88     |  |  |       |       |  
|                           | Options exercised                  |               |         | (13,300    | )                |   |       | 36.86     |  |  |       |       |  
|                           | Stock rights vested                |               |         |            |                  |   |       |           |  |  |       | (976  | )
|                           | Options and stock rights forfeited |               |         | (30,535    | )                |   |       | 57.71     |  |  |       | (68   | )
|                           |                                    |               |         |            |                  |   |       |           | 
|Balance, December 31, 2003 |                                    |               | 456,263 |            |                  |   | 52.93 |           |  |  | 460   |      
|                           | Options granted                    |               |         | 77,800     |                  |   |       | 51.50     |  |  |       |       |  
|                           | Options exercised                  |               |         | (10,100    | )                |   |       | 42.35     |  |  |       |       |  
|                           | Stock rights vested                |               |         |            |                  |   |       |           |  |  |       | (400  | )
|                           | Options forfeited                  |               |         | (36,473    | )                |   |       | 60.94     |  |  |       |       |  
|                           |                                    |               |         |            |                  |   |       |           | 
|Balance, December 31, 2004 |                                    |               | 487,490 |            |                  |   | 52.32 |           |  |  | 60    |      
|                           | Options and stock rights granted   |               |         | 69,600     |                  |   |       | 50.33     |  |  |       | 4,000 |  
|                           | Options exercised                  |               |         | (86,200    | )                |   |       | 40.11     |  |  |       |       |  
|                           | Stock rights vested                |               |         |            |                  |   |       |           |  |  |       | (60   | )
|                           | Options forfeited                  |               |         | (195,460   | )                |   |       | 56.21     |  |  |       |       |  
|                           |                                    |               |         |            |                  |   |       |           | 
|Balance, December 31, 2005 |                                    |               | 275,430 |            |                  | $ | 52.88 |           |  |  | 4,000 |      
|                           |                                    |               |         |            |                  |   |       |           | 



|                         |  |                     |         |           |                     |  |          |       |  |   |        |          |  |       |         |  |  |   |       | 
|------------------------ |  | ------------------- | ------- | --------- | ------------------- |  | -------- | ----- |  | - | ------ | -------- |  | ----- | ------- |  |  | - | ----- | 
|                         |  | Options Outstanding |         |           | Options Exercisable | 
|                         |  |                     |         |           |                     | 
|                         |  |                     |         | Weighted  |                     |  | Weighted |       |  |   |        | Weighted | 
|                         |  |                     |         | Average   |                     |  | Average  |       |  |   |        | Average  | 
|                         |  |                     |         | Remaining |                     |  | Exercise |       |  |   |        | Exercise | 
|Range of Exercise Prices |  | Number              |         |           | Life(Yrs.)          |  |          | Price |  |   | Number |          |  | Price |        
|                         |  |                     |         |           |                     |  |          |       |  |   |        |          |  |       |        
|$36.86-$47.75            |  |                     | 86,600  |           |                     |  | 7.0      |       |  | $ | 42.82  |          |  |       | 48,850  |  |  | $ | 42.28 | 
|$47.76-$57.50            |  |                     | 89,170  |           |                     |  | 6.7      |       |  | $ | 53.06  |          |  |       | 40,770  |  |  | $ | 54.88 | 
|$57.51-$65.50            |  |                     | 99,660  |           |                     |  | 4.0      |       |  | $ | 61.46  |          |  |       | 95,710  |  |  | $ | 61.52 | 
|                         |  |                     |         |           |                     |  |          |       |  |   |        |          |  |       |        
|                         |  |                     | 275,430 |           |                     |  | 5.8      |       |  | $ | 52.88  |          |  |       | 185,330 |  |  | $ | 54.99 | 
|                         |  |                     |         |           |                     |  |          |       |  |   |        |          |  |       |        



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                             |                                          |      |       |         |      |   |       |         |   |   |       |         |  
|-------------------------------------------- | ---------------------------------------- | ---- | ----- | ------- | ---- | - | ----- | ------- | - | - | ----- | ------- | -
|Year Ended December 31                       |                                          | 2005 |       |         | 2004 |   |       | 2003    |  
|                                             |                                          |      |       |         |      |   |       |         |  
|Assumptions:                                 |                                          |      |       |         |      |   |       |         |   |   |       |        
|                                             | Weighted average risk-free interest rate |      |       | 4.1     | %    |   |       | 3.7     | % |   |       | 4.4     | %
|                                             | Expected dividend yield                  |      |       | 0.00    | %    |   |       | 0.00    | % |   |       | 0.00    | %
|                                             | Expected volatility                      |      |       | 30.8    | %    |   |       | 27.5    | % |   |       | 38.0    | %
|                                             | Expected life of options                 |      |       | 6 years |      |   |       | 7 years |   |   |       | 5 years |  
|Weighted average fair value at date of grant |                                          | $    | 19.27 |         |      | $ | 19.63 |         |   | $ | 18.87 |        

NOTE 10


Income Taxes




|                                       |                         |      |        |        |      |   |        |        |   |   |        |         |  
|-------------------------------------- | ----------------------- | ---- | ------ | ------ | ---- | - | ------ | ------ | - | - | ------ | ------- | -
|Year Ended December 31                 |                         | 2005 |        |        | 2004 |   |        | 2003   |  
|                                       |                         |      |        |        |      |   |        |        |  
|Current tax expense (benefit)          |                         |      |        |        |      |   |        |        |   |   |        |        
|                                       | Continuing operations   |      | $      | 29     |      |   | $      | (3,228 | ) |   | $      | (5,734  | )
|                                       | Discontinued operations |      |        |        |      |   |        | (75    | ) |   |        | 11,959  |  
|                                       |                         |      |        |        |      |   |        |        |  
|                                       |                         |      | 29     |        |      |   | (3,303 | )      |   |   | 6,225  |        
|                                       |                         |      |        |        |      |   |        |        |  
|Deferred tax expense (benefit)         |                         |      |        |        |      |   |        |        |   |   |        |        
|                                       | Continuing operations   |      |        | (8,991 | )    |   |        | (4,578 | ) |   |        | (7,295  | )
|                                       | Discontinued operations |      |        |        |      |   |        |        |   |   |        | 1,825   |  
|                                       |                         |      |        |        |      |   |        |        |  
|                                       |                         |      | (8,991 | )      |      |   | (4,578 | )      |   |   | (5,470 | )      
|                                       |                         |      |        |        |      |   |        |        |  
|                                       | Total                   |      | $      | (8,962 | )    |   | $      | (7,881 | ) |   | $      | 755     |  
|                                       |                         |      |        |        |      |   |        |        |  
|Income taxes are allocated as follows: |                         |      |        |        |      |   |        |        |   |   |        |        
|                                       | Continuing operations   |      | $      | (8,962 | )    |   | $      | (7,806 | ) |   | $      | (13,029 | )
|                                       | Discontinued operations |      |        |        |      |   |        | (75    | ) |   |        | 13,784  |  
|                                       |                         |      |        |        |      |   |        |        |  
|                                       |                         | $    | (8,962 | )      |      | $ | (7,881 | )      |   | $ | 755    |        
|                                       |                         |      |        |        |      |   |        |        |  

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                                    |  |      |        |   |      |   |        |      |  |   |         |  
|----------------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ------- | -
|Year Ended December 31                                                              |  | 2005 |        |   | 2004 |   |        | 2003 | 
|                                                                                    |  |      |        |   |      |   |        |      | 
|Normal benefit computed at 35% of pretax income                                     |  | $    | (4,912 | ) |      | $ | (6,869 | )    |  | $ | (9,742  | )
|Dividends received deduction                                                        |  |      | (690   | ) |      |   | (565   | )    |  |   | (960    | )
|State taxes, net of federal tax benefit                                             |  |      | (119   | ) |      |   | (8     | )    |  |   | (1,682  | )
|Change in state tax valuation allowance                                             |  |      | 119    |   |      |   | 8      |      |  |   | (391    | )
|Pension death and disability benefits, and increases in pension
    values          |  |      | (291   | ) |      |   | (438   | )    |  |   | (362    | )
|Non-deductible expenses                                                             |  |      | 252    |   |      |   | 283    |      |  |   | 249     |  
|Worthless stock deduction of liquidated subsidiary                                  |  |      | (3,437 | ) |      |   |        |      |  |   |         |  
|Impact of rate differences in income taxes allocated to
    discontinued operations |  |      |        |   |      |   |        |      |  |   | (419    | )
|Other                                                                               |  |      | 116    |   |      |   | (217   | )    |  |   | 278     |  
|                                                                                    |  |      |        |   |      |   |        |      | 
|                                                                                    |  | $    | (8,962 | ) |      | $ | (7,806 | )    |  | $ | (13,029 | )
|                                                                                    |  |      |        |   |      |   |        |      | 



|            |                                        |      |         |         |      |   |         |         |  
|----------- | -------------------------------------- | ---- | ------- | ------- | ---- | - | ------- | ------- | -
|December 31 |                                        | 2005 |         |         | 2004 |  
|            |                                        |      |         |         |      |  
|Assets      |                                        |      |         |         |      |   |         |        
|            | Accrued employee benefits              |      | $       | 8,154   |      |   | $       | 8,095   |  
|            | Allowance for doubtful accounts        |      |         | 187     |      |   |         | 241     |  
|            | Goodwill                               |      |         | 9,053   |      |   |         | 12,081  |  
|            | Net operating loss carryforwards       |      |         | 10,271  |      |   |         | 651     |  
|            | Contract termination charge            |      |         | 1,607   |      |   |         |         |  
|            | Other                                  |      |         | 518     |      |   |         |         |  
|            |                                        |      |         |         |      |  
|            |                                        |      | 29,790  |         |      |   | 21,068  |        
|            |                                        |      |         |         |      |  
|           
|Liabilities |                                        |      |         |         |      |   |         |        
|            | Accumulated other comprehensive income |      |         | (47,416 | )    |   |         | (43,000 | )
|            | Property, plant and equipment          |      |         | (11,306 | )    |   |         | (11,745 | )
|            | Prepaid insurance                      |      |         | (454    | )    |   |         | (540    | )
|            | Other                                  |      |         |         |      |   |         | (74     | )
|            |                                        |      |         |         |      |  
|            |                                        |      | (59,176 | )       |      |   | (55,359 | )      
|            |                                        |      |         |         |      |  
|            | Valuation allowance                    |      |         | (1,330  | )    |   |         | (1,211  | )
|Net         |                                        | $    | (30,716 | )       |      | $ | (35,502 | )      
|            |                                        |      |         |         |      |  
|Current     |                                        |      | 665     |         |      |   | 631     |        
|Noncurrent  |                                        |      | (31,381 | )       |      |   | (36,133 | )      
|            |                                        |      |         |         |      |  
|            |                                        | $    | (30,716 | )       |      | $ | (35,502 | )      
|            |                                        |      |         |         |      |  



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








NOTE 11




| |                    
| | -------------------
| | Retirement Benefits





|                          |  |      |     | 
|------------------------- |  | ---- | --- | 
|Year Ended December 31    |  | 2003 |    
|                          |  |      |    
|Service cost              |  | $    | 44  | 
|Settlement                |  |      | 607 | 
|                          |  |      |    
|Net periodic pension cost |  | $    | 651 | 
|                          |  |      |    





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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                |  |      |        |   |      |   |        |  
|----------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|Year Ended December 31                          |  | 2005 |        |   | 2004 |  
|                                                |  |      |        |   |      |  
|Projected benefit obligation, beginning of year |  | $    | 20,012 |   |      | $ | 19,654 |  
|Service cost                                    |  |      | 80     |   |      |   | 291    |  
|Interest cost                                   |  |      | 1,028  |   |      |   | 1,096  |  
|Assumption changes                              |  |      | 696    |   |      |   | 1,124  |  
|Termination benefits                            |  |      |        |   |      |   | 471    |  
|Actuarial gains                                 |  |      | (469   | ) |      |   | (1,493 | )
|Curtailment gain                                |  |      | (597   | ) |      |   |        |  
|Benefit payments                                |  |      | (1,191 | ) |      |   | (1,131 | )
|                                                |  |      |        |   |      |  
|Projected benefit obligation, end of year       |  | $    | 19,559 |   |      | $ | 20,012 |  
|                                                |  |      |        |   |      |  

|                                   |  |      |        |   |      |   |        |  
|---------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|December 31                        |  | 2005 |        |   | 2004 |  
|                                   |  |      |        |   |      |  
|Unfunded status                    |  | $    | 19,559 |   |      | $ | 20,012 |  
|Unrecognized transition obligation |  |      |        |   |      |   | (503   | )
|Unrecognized net loss              |  |      | (3,341 | ) |      |   | (4,024 | )
|                                   |  |      |        |   |      |  
|Net amount recognized              |  | $    | 16,218 |   |      | $ | 15,485 |  
|                                   |  |      |        |   |      |  



|                                     |  |      |        |   |      |   |        |  
|------------------------------------ |  | ---- | ------ | - | ---- | - | ------ | -
|December 31                          |  | 2005 |        |   | 2004 |  
|                                     |  |      |        |   |      |  
|Accrued pension liability            |  | $    | 19,559 |   |      | $ | 18,882 |  
|Accumulated other comprehensive loss |  |      | (3,341 | ) |      |   | (3,397 | )
|                                     |  |      |        |   |      |  
|Net amount recognized                |  | $    | 16,218 |   |      | $ | 15,485 |  
|                                     |  |      |        |   |      |  



|                              |  |      |      |  |      |  |      |  
|----------------------------- |  | ---- | ---- |  | ---- |  | ---- | -
|                              |  | 2005 |      |  | 2004 | 
|                              |  |      |      |  |      | 
|Discount rate                 |  |      | 5.48 |  |      |  | 5.74 | %
|Rate of compensation increase |  |      | N/A  |  |      |  | 3.00 | %



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                 |  |      |       |  |      |   |       |      |  |   |       | 
|---------------------------------------------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ----- | 
|Year Ended December 31                                           |  | 2005 |       |  | 2004 |   |       | 2003 | 
|                                                                 |  |      |       |  |      |   |       |      | 
|Service cost                                                     |  | $    | 80    |  |      | $ | 291   |      |  | $ | 539   | 
|Interest cost                                                    |  |      | 1,028 |  |      |   | 1,096 |      |  |   | 1,243 | 
|Amortization of transition obligation                            |  |      | 52    |  |      |   | 104   |      |  |   | 89    | 
|Recognition of remaining transition obligation, curtailment loss |  |      | 451   |  |      |   |       |      |  |   |       | 
|Amortization of loss                                             |  |      | 267   |  |      |   | 213   |      |  |   | 290   | 
|                                                                 |  |      |       |  |      |   |       |      | 
|Net periodic pension cost                                        |  |      | 1,878 |  |      |   | 1,704 |      |  |   | 2,161 | 
|Cost of termination benefits                                     |  |      |       |  |      |   | 471   |      |  |   |       | 
|                                                                 |  |      |       |  |      |   |       |      | 
|Total cost, including termination benefits                       |  | $    | 1,878 |  |      | $ | 2,175 |      |  | $ | 2,161 | 
|                                                                 |  |      |       |  |      |   |       |      | 



|                              |  |      |               |  |      |  |      |  
|----------------------------- |  | ---- | ------------- |  | ---- |  | ---- | -
|                              |  | 2005 |               |  | 2004 | 
|                              |  |      |               |  |      | 
|Discount Rate                 |  |      | 5.02% - 5.74% |  |      |  | 6.25 | %
|Rate of Compensation increase |  |      | 0.00% - 3.00% |  |      |  | 3.00 | %









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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


NOTE 12




| |                    
| | -------------------
| | Segment Information





Revenue


|                           |                       |      |         |         |      |   |         |         |  |   |         |         | 
|-------------------------- | --------------------- | ---- | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|Year Ended December 31     |                       | 2005 |         |         | 2004 |   |         | 2003    | 
|                           |                       |      |         |         |      |   |         |         | 
|Television                 |                       | $    | 93,083  |         |      | $ | 101,190 |         |  | $ | 88,676  |        
|Radio                      |                       |      | 48,334  |         |      |   | 48,253  |         |  |   | 44,221  |        
|Fisher Plaza               |                       |      | 8,061   |         |      |   | 4,555   |         |  |   | 5,494   |        
|Corporate and eliminations |                       |      | (159    | )       |      |   | (132    | )       |  |   | (4      | )      
|                           |                       |      |         |         |      |   |         |         | 
|                           | Continuing operations |      |         | 149,319 |      |   |         | 153,866 |  |   |         | 138,387 | 
|Discontinued operations    |                       |      |         |         |      |   |         |         |  |   | 17,458  |        
|                           |                       |      |         |         |      |   |         |         | 
|                           |                       | $    | 149,319 |         |      | $ | 153,866 |         |  | $ | 155,845 |        
|                           |                       |      |         |         |      |   |         |         | 

Depreciation and amortization


|                           |                       |      |        |        |      |   |        |        |  |   |        |        | 
|-------------------------- | --------------------- | ---- | ------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ | 
|Year Ended December 31     |                       | 2005 |        |        | 2004 |   |        | 2003   | 
|                           |                       |      |        |        |      |   |        |        | 
|Television                 |                       | $    | 7,940  |        |      | $ | 10,588 |        |  | $ | 11,700 |       
|Radio                      |                       |      | 1,356  |        |      |   | 1,460  |        |  |   | 1,535  |       
|Fisher Plaza               |                       |      | 3,544  |        |      |   | 3,762  |        |  |   | 2,588  |       
|Corporate and eliminations |                       |      | 245    |        |      |   | 207    |        |  |   | 357    |       
|                           |                       |      |        |        |      |   |        |        | 
|                           | Continuing operations |      |        | 13,085 |      |   |        | 16,017 |  |   |        | 16,180 | 
|Discontinued operations    |                       |      |        |        |      |   |        |        |  |   | 2,621  |       
|                           |                       |      |        |        |      |   |        |        | 
|                           |                       | $    | 13,085 |        |      | $ | 16,017 |        |  | $ | 18,801 |       
|                           |                       |      |        |        |      |   |        |        | 

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                                   |  |      |        |   |      |   |         |      |  |   |         |  
|---------------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------- | ---- |  | - | ------- | -
|Year Ended December 31                                                             |  | 2005 |        |   | 2004 |   |         | 2003 | 
|                                                                                   |  |      |        |   |      |   |         |      | 
|Television                                                                         |  | $    | 5,032  |   |      | $ | 17,698  |      |  | $ | 4,755   |  
|Radio                                                                              |  |      | 1,452  |   |      |   | 2,106   |      |  |   | (996    | )
|Fisher Plaza                                                                       |  |      | 627    |   |      |   | (2,851  | )    |  |   | (107    | )
|Corporate and eliminations                                                         |  |      | (7,419 | ) |      |   | (24,804 | )    |  |   | (18,404 | )
|                                                                                   |  |      |        |   |      |   |         |      | 
|Total segment loss from continuing operations before interest
    and income taxes |  |      | (308   | ) |      |   | (7,851  | )    |  |   | (14,752 | )
|Discontinued operations                                                            |  |      |        |   |      |   | (207    | )    |  |   | 41,243  |  
|                                                                                   |  |      |        |   |      |   |         |      | 
|                                                                                   |  | $    | (308   | ) |      | $ | (8,058  | )    |  | $ | 26,491  |  
|                                                                                   |  |      |        |   |      |   |         |      | 



|                                                                                   |  |      |         |   |      |   |         |      |  |   |         |  
|---------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|Year Ended December 31                                                             |  | 2005 |         |   | 2004 |   |         | 2003 | 
|                                                                                   |  |      |         |   |      |   |         |      | 
|Total segment loss from continuing operations before interest
    and income taxes |  | $    | (308    | ) |      | $ | (7,851  | )    |  | $ | (14,752 | )
|Interest expense                                                                   |  |      | (13,726 | ) |      |   | (11,776 | )    |  |   | (13,081 | )
|                                                                                   |  |      |         |   |      |   |         |      | 
|Consolidated loss from continuing operations before income taxes                   |  | $    | (14,034 | ) |      | $ | (19,627 | )    |  | $ | (27,833 | )
|                                                                                   |  |      |         |   |      |   |         |      | 



Total assets


|                           |  |      |         |  |      |   |         | 
|-------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|December 31                |  | 2005 |         |  | 2004 |  
|                           |  |      |         |  |      |  
|Television                 |  | $    | 92,543  |  |      | $ | 93,799  | 
|Radio                      |  |      | 41,487  |  |      |   | 44,048  | 
|Fisher Plaza               |  |      | 118,611 |  |      |   | 122,579 | 
|Corporate and eliminations |  |      | 187,752 |  |      |   | 175,446 | 
|                           |  |      |         |  |      |  
|                           |  | $    | 440,393 |  |      | $ | 435,872 | 
|                           |  |      |         |  |      |  

Goodwill


|            |  |      |        |  |      |   |        | 
|----------- |  | ---- | ------ |  | ---- | - | ------ | 
|December 31 |  | 2005 |        |  | 2004 |  
|            |  |      |        |  |      |  
|Television  |  | $    | 21,453 |  |      | $ | 21,453 | 
|Radio       |  |      | 16,901 |  |      |   | 16,901 | 
|            |  |      |        |  |      |  
|            |  | $    | 38,354 |  |      | $ | 38,354 | 
|            |  |      |        |  |      |  

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Capital expenditures


|                           |  |      |       |  |      |   |       |      |  |   |        | 
|-------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ------ | 
|Year Ended December 31     |  | 2005 |       |  | 2004 |   |       | 2003 | 
|                           |  |      |       |  |      |   |       |      | 
|Television                 |  | $    | 4,260 |  |      | $ | 3,069 |      |  | $ | 1,859  | 
|Radio                      |  |      | 595   |  |      |   | 440   |      |  |   | 593    | 
|Fisher Plaza               |  |      | 2,361 |  |      |   | 3,093 |      |  |   | 9,263  | 
|Corporate and eliminations |  |      | 307   |  |      |   | 189   |      |  |   | 29     | 
|                           |  |      |       |  |      |   |       |      | 
|Continuing operations      |  |      | 7,523 |  |      |   | 6,791 |      |  |   | 11,744 | 
|Discontinued operations    |  |      |       |  |      |   |       |      |  |   | 669    | 
|                           |  |      |       |  |      |   |       |      | 
|                           |  | $    | 7,523 |  |      | $ | 6,791 |      |  | $ | 12,413 | 
|                           |  |      |       |  |      |   |       |      | 





NOTE 13




| |                              
| | -----------------------------
| | Commitments and Contingencies



|           |  |             |       | 
|---------- |  | ----------- | ----- | 
|           |  | Lease       |      
|Year       |  | Commitments |      
|           |  |             |      
|2006       |  | $           | 1,007 | 
|2007       |  |             | 956   | 
|2008       |  |             | 690   | 
|2009       |  |             | 488   | 
|2010       |  |             | 412   | 
|Thereafter |  |             | 2,425 | 
|           |  |             |      
|           |  | $           | 5,978 | 
|           |  |             |      





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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


NOTE 14




| |                                          
| | -----------------------------------------
| | Interim Financial Information (Unaudited)



|                                            |                              |         |   |        |         |   |   |         |       |   |         |        |       |        |   |        |      |  |   |         |       |  
|------------------------------------------- | ---------------------------- | ------- | - | ------ | ------- | - | - | ------- | ----- | - | ------- | ------ | ----- | ------ | - | ------ | ---- |  | - | ------- | ----- | -
|                                            |                              | First   |   |        | Second  |   |   | Third   |       |   | Fourth  |        |       |       
|                                            |                              | Quarter |   |        | Quarter |   |   | Quarter |       |   | Quarter |        |       | Annual |  
|                                            |                              |         |   |        |         |   |   |         |       |   |         |        |       |        |  
|Revenue                                     |                              |         |   |        |         |   |   |         |       |   |         |        |       |        |   |        |      |  |   |        
|                                            | 2005                         |         | $ | 30,957 |         |   | $ | 40,122  |       |   | $       | 38,804 |       |        | $ | 39,436 |      |  | $ | 149,319 |      
|                                            | 2004                         |         | $ | 30,892 |         |   | $ | 40,374  |       |   | $       | 40,251 |       |        | $ | 42,349 |      |  | $ | 153,866 |      
|Income (loss) from continuing operations    |                              |         |   |        |         |   |   |         |       |   |         |        |       |        |   |        |      |  |   |        
|                                            | 2005                         |         | $ | (5,068 | )       |   | $ | (1,090  | )     |   | $       | (790   | )     |        | $ | 1,876  |      |  | $ | (5,072  | )    
|                                            | 2004                         |         | $ | (9,713 | )       |   | $ | (1,444  | )     |   | $       | (5,212 | )     |        | $ | 4,548  |      |  | $ | (11,821 | )    
|Income (loss) from discontinued operations  |                              |         |   |        |         |   |   |         |       |   |         |        |       |        |   |        |      |  |   |        
|                                            | 2005                         |         | $ |       |         |   | $ |         |       |   | $       |        |       |        | $ |        |      |  | $ |        |      
|                                            | 2004                         |         | $ | (132   | )       |   | $ |         |       |   | $       |        |       |        | $ |        |      |  | $ | (132    | )    
|Net income (loss)                           |                              |         |   |        |         |   |   |         |       |   |         |        |       |        |   |        |      |  |   |        
|                                            | 2005                         |         | $ | (5,068 | )       |   | $ | (1,090  | )     |   | $       | (790   | )     |        | $ | 1,876  |      |  | $ | (5,072  | )    
|                                            | 2004                         |         | $ | (9,845 | )       |   | $ | (1,444  | )     |   | $       | (5,212 | )     |        | $ | 4,548  |      |  | $ | (11,953 | )    
|Income (loss) per share  basic:            |                              |         |   |        |         |   |   |         |       |   |         |        |       |        |   |        |      |  |   |        
|                                            | From continuing operations   |         |   |        |         |   |   |         |       |   |         |        |       |        |   |        |      |  |   |         |      
|                                            |                              | 2005    |   | $      | (0.59   | ) |   | $       | (0.13 | ) |         | $      | (0.09 | )      |   | $      | 0.22 |  |   | $       | (0.58 | )
|                                            |                              | 2004    |   | $      | (1.13   | ) |   | $       | (0.17 | ) |         | $      | (0.60 | )      |   | $      | 0.53 |  |   | $       | (1.37 | )
|                                            | From discontinued operations |         |   |        |         |   |   |         |       |   |         |        |       |        |   |        |      |  |   |         |      
|                                            |                              | 2005    |   | $      |        |   |   | $       |       |   |         | $      |       |        |   | $      |      |  |   | $       |      |  
|                                            |                              | 2004    |   | $      | (0.01   | ) |   | $       |       |   |         | $      |       |        |   | $      |      |  |   | $       | (0.02 | )
|                                            | Net income (loss)            |         |   |        |         |   |   |         |       |   |         |        |       |        |   |        |      |  |   |         |      
|                                            |                              | 2005    |   | $      | (0.59   | ) |   | $       | (0.13 | ) |         | $      | (0.09 | )      |   | $      | 0.22 |  |   | $       | (0.58 | )
|                                            |                              | 2004    |   | $      | (1.14   | ) |   | $       | (0.17 | ) |         | $      | (0.60 | )      |   | $      | 0.53 |  |   | $       | (1.39 | )
|Income (loss) per share, assuming dilution: |                              |         |   |        |         |   |   |         |       |   |         |        |       |        |   |        |      |  |   |        
|                                            | From continuing operations   |         |   |        |         |   |   |         |       |   |         |        |       |        |   |        |      |  |   |         |      
|                                            |                              | 2005    |   | $      | (0.59   | ) |   | $       | (0.13 | ) |         | $      | (0.09 | )      |   | $      | 0.22 |  |   | $       | (0.58 | )
|                                            |                              | 2004    |   | $      | (1.13   | ) |   | $       | (0.17 | ) |         | $      | (0.60 | )      |   | $      | 0.53 |  |   | $       | (1.37 | )
|                                            | From discontinued operations |         |   |        |         |   |   |         |       |   |         |        |       |        |   |        |      |  |   |         |      
|                                            |                              | 2005    |   | $      |        |   |   | $       |       |   |         | $      |       |        |   | $      |      |  |   | $       |      |  
|                                            |                              | 2004    |   | $      | (0.01   | ) |   | $       |       |   |         | $      |       |        |   | $      |      |  |   | $       | (0.02 | )
|                                            | Net income (loss)            |         |   |        |         |   |   |         |       |   |         |        |       |        |   |        |      |  |   |         |      
|                                            |                              | 2005    |   | $      | (0.59   | ) |   | $       | (0.13 | ) |         | $      | (0.09 | )      |   | $      | 0.22 |  |   | $       | (0.58 | )
|                                            |                              | 2004    |   | $      | (1.14   | ) |   | $       | (0.17 | ) |         | $      | (0.60 | )      |   | $      | 0.53 |  |   | $       | (1.39 | )



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






NOTE 15




| |                                     
| | ------------------------------------
| | Financial Information for Guarantors





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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Financial Information for Guarantors


Condensed Consolidated Statement of Operations


for the year ended December 31, 2005


|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |        |   |   |         |        | 
|------------------------------------------------------------ | ----------------------------------- | --------------- | ------- | ------ | ------------ | - | ------- | ------------ | ------ | --------------- | ------------ | ------ | - | - | ------- | ------ | 
|                                                             |                                     |                 |         | Wholly |              |   |         |              | Fisher |                
|                                                             |                                     | Fisher          |         |        | Owned        |   |         |              |        | Communications, |             
|                                                             |                                     | Communications, |         |        | Guarantor    |   |         |              |        | Inc. and        |             
|                                                             |                                     | Inc.            |         |        | Subsidiaries |   |         | Eliminations |        |                 | Subsidiaries |       
|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |       
|                                                             |                                     | (In thousands)  |        
|Revenue                                                      |                                     | $               |         |        |              | $ | 149,492 |              |        | $               | (173         | )      |   | $ | 149,319 |       
|Costs and expenses                                           |                                     |                 |         |        |              |   |         |              |        |                 |              |        |   |   |         |       
|                                                             | Cost of services sold               |                 |         |        |              |   |         | 72,239       |        |                 |              | 1,559  |   |   |         | 73,798 | 
|                                                             | Selling expenses                    |                 |         |        |              |   |         | 32,344       |        |                 |              |        |   |   |         | 32,344 | 
|                                                             | General and administrative expenses |                 |         | 10,018 |              |   |         | 25,788       |        |                 |              | (1,732 | ) |   |         | 34,074 | 
|                                                             | Depreciation and amortization       |                 |         | 243    |              |   |         | 12,842       |        |                 |              |        |   |   |         | 13,085 | 
|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |       
|                                                             |                                     |                 | 10,261  |        |              |   | 143,213 |              |        |                 | (173         | )      |   |   | 153,301 |       
|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |       
|Income (loss) from operations                                |                                     |                 | (10,261 | )      |              |   | 6,279   |              |        |                 |              |        |   |   | (3,982  | )     
|Other income, net                                            |                                     |                 | 2,936   |        |              |   | 738     |              |        |                 |              |        |   |   | 3,674   |       
|Equity in income of subsidiaries                             |                                     |                 | 4,543   |        |              |   |         |              |        |                 | (4,543       | )      |   |   |        |       
|Interest expense, net                                        |                                     |                 | (13,703 | )      |              |   | (23     | )            |        |                 |              |        |   |   | (13,726 | )     
|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |       
|Income (loss) from continuing operations before income taxes |                                     |                 | (16,485 | )      |              |   | 6,994   |              |        |                 | (4,543       | )      |   |   | (14,034 | )     
|Provision (benefit) for federal and state income taxes       |                                     |                 | (11,413 | )      |              |   | 2,451   |              |        |                 |              |        |   |   | (8,962  | )     
|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |       
|Net income (loss)                                            |                                     | $               | (5,072  | )      |              | $ | 4,543   |              |        | $               | (4,543       | )      |   | $ | (5,072  | )     
|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |       

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##### Table of Contents



FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Financial Information for Guarantors


Condensed Consolidated Statement of Operations


for the Year Ended December 31, 2004


|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |        |   |   |         |        | 
|------------------------------------------------------------ | ----------------------------------- | --------------- | ------- | ------ | ------------ | - | ------- | ------------ | ------ | --------------- | ------------ | ------ | - | - | ------- | ------ | 
|                                                             |                                     |                 |         | Wholly |              |   |         |              | Fisher |                
|                                                             |                                     | Fisher          |         |        | Owned        |   |         |              |        | Communications, |             
|                                                             |                                     | Communications, |         |        | Guarantor    |   |         |              |        | Inc. and        |             
|                                                             |                                     | Inc.            |         |        | Subsidiaries |   |         | Eliminations |        |                 | Subsidiaries |       
|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |       
|                                                             |                                     | (In thousands)  |        
|Revenue                                                      |                                     | $               |         |        |              | $ | 154,086 |              |        | $               | (220         | )      |   | $ | 153,866 |       
|Costs and expenses                                           |                                     |                 |         |        |              |   |         |              |        |                 |              |        |   |   |         |       
|                                                             | Cost of services sold               |                 |         |        |              |   |         | 67,651       |        |                 |              | 1,472  |   |   |         | 69,123 | 
|                                                             | Selling expenses                    |                 |         |        |              |   |         | 27,626       |        |                 |              |        |   |   |         | 27,626 | 
|                                                             | General and administrative expenses |                 |         | 10,057 |              |   |         | 26,317       |        |                 |              | (1,692 | ) |   |         | 34,682 | 
|                                                             | Depreciation and amortization       |                 |         | 204    |              |   |         | 15,813       |        |                 |              |        |   |   |         | 16,017 | 
|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |       
|                                                             |                                     |                 | 10,261  |        |              |   | 137,407 |              |        |                 | (220         | )      |   |   | 147,448 |       
|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |       
|Income (loss) from operations                                |                                     |                 | (10,261 | )      |              |   | 16,679  |              |        |                 |              |        |   |   | 6,418   |       
|Net gain (loss) on derivative instruments                    |                                     |                 | (13,563 | )      |              |   | 907     |              |        |                 |              |        |   |   | (12,656 | )     
|Loss from extinguishment of long-term debt                   |                                     |                 | (3,170  | )      |              |   | (1,864  | )            |        |                 |              |        |   |   | (5,034  | )     
|Other income, net                                            |                                     |                 | 2,326   |        |              |   | 1,095   |              |        |                 |              |        |   |   | 3,421   |       
|Equity in income of subsidiaries                             |                                     |                 | 8,104   |        |              |   |         |              |        |                 | (8,104       | )      |   |   |        |       
|Interest expense, net                                        |                                     |                 | (7,476  | )      |              |   | (4,300  | )            |        |                 |              |        |   |   | (11,776 | )     
|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |       
|Income (loss) from continuing operations before income taxes |                                     |                 | (24,040 | )      |              |   | 12,517  |              |        |                 | (8,104       | )      |   |   | (19,627 | )     
|Provision (benefit) for federal and state income taxes       |                                     |                 | (12,087 | )      |              |   | 4,281   |              |        |                 |              |        |   |   | (7,806  | )     
|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |       
|Income (loss) from continuing operations                     |                                     |                 | (11,953 | )      |              |   | 8,236   |              |        |                 | (8,104       | )      |   |   | (11,821 | )     
|Loss from discontinued operations net of income taxes        |                                     |                 |         |        |              |   | (132    | )            |        |                 |              |        |   |   | (132    | )     
|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |       
|Net income (loss)                                            |                                     | $               | (11,953 | )      |              | $ | 8,104   |              |        | $               | (8,104       | )      |   | $ | (11,953 | )     
|                                                             |                                     |                 |         |        |              |   |         |              |        |                 |              |       

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##### Table of Contents



FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Financial Information for Guarantors


Condensed Consolidated Statement of Operations


for the Year Ended December 31, 2003


|                                                               |                                     |                 |         |                |              |   |         |              |        |                 |              |        |   |   |         |        | 
|-------------------------------------------------------------- | ----------------------------------- | --------------- | ------- | -------------- | ------------ | - | ------- | ------------ | ------ | --------------- | ------------ | ------ | - | - | ------- | ------ | 
|                                                               |                                     |                 |         | Wholly         |              |   |         |              | Fisher |                
|                                                               |                                     | Fisher          |         |                | Owned        |   |         |              |        | Communications, |             
|                                                               |                                     | Communications, |         |                | Guarantor    |   |         |              |        | Inc. and        |             
|                                                               |                                     | Inc.            |         |                | Subsidiaries |   |         | Eliminations |        |                 | Subsidiaries |       
|                                                               |                                     |                 |         |                |              |   |         |              |        |                 |              |       
|                                                               |                                     |                 |         | (In thousands) |              |   |        
|Revenue                                                        |                                     | $               |         |                |              | $ | 138,978 |              |        | $               | (591         | )      |   | $ | 138,387 |       
|Costs and expenses                                             |                                     |                 |         |                |              |   |         |              |        |                 |              |        |   |   |         |       
|                                                               | Cost of services sold               |                 |         |                |              |   |         | 68,569       |        |                 |              | 614    |   |   |         | 69,183 | 
|                                                               | Selling expenses                    |                 |         |                |              |   |         | 25,259       |        |                 |              |        |   |   |         | 25,259 | 
|                                                               | General and administrative expenses |                 |         | 13,469         |              |   |         | 27,565       |        |                 |              | (1,205 | ) |   |         | 39,829 | 
|                                                               | Depreciation and amortization       |                 |         | 354            |              |   |         | 15,826       |        |                 |              |        |   |   |         | 16,180 | 
|                                                               |                                     |                 |         |                |              |   |         |              |        |                 |              |       
|                                                               |                                     |                 | 13,823  |                |              |   | 137,219 |              |        |                 | (591         | )      |   |   | 150,451 |       
|                                                               |                                     |                 |         |                |              |   |         |              |        |                 |              |       
|Income (loss) from operations                                  |                                     |                 | (13,823 | )              |              |   | 1,759   |              |        |                 |              |        |   |   | (12,064 | )     
|Net gain (loss) on derivative instruments                      |                                     |                 | (10,299 | )              |              |   | 3,388   |              |        |                 |              |        |   |   | (6,911  | )     
|Loss from extinguishment of long-term debt                     |                                     |                 |         |                |              |   | (2,204  | )            |        |                 |              |        |   |   | (2,204  | )     
|Other income, net                                              |                                     |                 | 5,972   |                |              |   | 455     |              |        |                 |              |        |   |   | 6,427   |       
|Equity in income of subsidiaries                               |                                     |                 | 21,104  |                |              |   |         |              |        |                 | (21,104      | )      |   |   |        |       
|Interest expense, net                                          |                                     |                 | (5,210  | )              |              |   | (7,871  | )            |        |                 |              |        |   |   | (13,081 | )     
|                                                               |                                     |                 |         |                |              |   |         |              |        |                 |              |       
|Loss from continuing operations before income taxes            |                                     |                 | (2,256  | )              |              |   | (4,473  | )            |        |                 | (21,104      | )      |   |   | (27,833 | )     
|Benefit for federal and state income taxes                     |                                     |                 | (10,484 | )              |              |   | (2,545  | )            |        |                 |              |        |   |   | (13,029 | )     
|                                                               |                                     |                 |         |                |              |   |         |              |        |                 |              |       
|Income (loss) from continuing operations                       |                                     |                 | 8,228   |                |              |   | (1,928  | )            |        |                 | (21,104      | )      |   |   | (14,804 | )     
|Income (loss) from discontinued operations net of income taxes |                                     |                 |         |                |              |   | 23,032  |              |        |                 |              |        |   |   | 23,032  |       
|                                                               |                                     |                 |         |                |              |   |         |              |        |                 |              |       
|Net income (loss)                                              |                                     | $               | 8,228   |                |              | $ | 21,104  |              |        | $               | (21,104      | )      |   | $ | 8,228   |       
|                                                               |                                     |                 |         |                |              |   |         |              |        |                 |              |       

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##### Table of Contents



FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Financial Information for Guarantors


Condensed Consolidated Balance Sheet


as of December 31, 2005


|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |          |   |        |         |        |         |        | 
|---------------------------------------------------- | ----------------------------------------------------------------- | ---------------------------------------- | ------------------------- | ------ | ------------ | ------ | ------- | ------------ | ------ | --------------- | ------------ | -------- | - | ------ | ------- | ------ | ------- | ------ | 
|                                                     |                                                                   |                                          |                           | Wholly |              |        |         |              | Fisher |                
|                                                     |                                                                   | Fisher                                   |                           |        | Owned        |        |         |              |        | Communications, |             
|                                                     |                                                                   | Communications,                          |                           |        | Guarantor    |        |         |              |        | Inc. and        |             
|                                                     |                                                                   | Inc.                                     |                           |        | Subsidiaries |        |         | Eliminations |        |                 | Subsidiaries |         
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         
|                                                     |                                                                   | (In thousands)                           |                          
|ASSETS                                              
|Current Assets                                       |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |          |   |        |         |       
|                                                     | Cash and cash equivalents                                         |                                          | $                         | 3,660  |              |        | $       | 15,962       |        |                 | $            |          |   |        | $       | 19,622 |        
|                                                     | Receivables, net                                                  |                                          |                           | 105    |              |        |         | 28,061       |        |                 |              |          |   |        |         | 28,166 |        
|                                                     | Due from affiliate                                                |                                          |                           | 6,184  |              |        |         |              |        |                 |              | (6,184   | ) |        |         |       |        
|                                                     | Income taxes receivable                                           |                                          |                           | 1,538  |              |        |         |              |        |                 |              | (552     | ) |        |         | 986    |        
|                                                     | Deferred income taxes                                             |                                          |                           | 7      |              |        |         | 658          |        |                 |              |          |   |        |         | 665    |        
|                                                     | Prepaid expenses                                                  |                                          |                           | 414    |              |        |         | 3,881        |        |                 |              |          |   |        |         | 4,295  |        
|                                                     | Television and radio broadcast rights                             |                                          |                           |        |              |        |         | 6,519        |        |                 |              |          |   |        |         | 6,519  |        
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         
|                                                     |                                                                   |                                          | Total current assets      |        |              | 11,908 |         |              |        | 55,081          |              |          |   | (6,736 | )       |        |         | 60,253 | 
|Marketable securities, at market value               |                                                                   |                                          | 169,634                   |        |              |        | 419     |              |        |                 |              |          |   |        | 170,053 |       
|Investment in consolidated subsidiaries              |                                                                   |                                          | 225,057                   |        |              |        |         |              |        |                 | (225,057     | )        |   |        |         |       
|Cash value of life insurance and retirement deposits |                                                                   |                                          | 5,115                     |        |              |        | 10,188  |              |        |                 |              |          |   |        | 15,303  |       
|Television and radio broadcast rights                |                                                                   |                                          |                           |        |              |        | 2,075   |              |        |                 |              |          |   |        | 2,075   |       
|Goodwill, net                                        |                                                                   |                                          |                           |        |              |        | 38,354  |              |        |                 |              |          |   |        | 38,354  |       
|Intangible assets                                    |                                                                   |                                          |                           |        |              |        | 1,244   |              |        |                 |              |          |   |        | 1,244   |       
|Investment in equity investee                        |                                                                   |                                          |                           |        |              |        | 2,759   |              |        |                 |              |          |   |        | 2,759   |       
|Prepaid financing fees and other assets              |                                                                   |                                          | 5,169                     |        |              |        | 871     |              |        |                 |              |          |   |        | 6,040   |       
|Property, plant and equipment, net                   |                                                                   |                                          | 904                       |        |              |        | 143,408 |              |        |                 |              |          |   |        | 144,312 |       
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         
|Total Assets                                         |                                                                   | $                                        | 417,787                   |        |              | $      | 254,399 |              |        | $               | (231,793     | )        |   | $      | 440,393 |       
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         
|                                                    
|LIABILITIES AND STOCKHOLDERS EQUITY                
|Current Liabilities                                  |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |          |   |        |         |       
|                                                     | Trade accounts payable                                            |                                          | $                         | 693    |              |        | $       | 2,790        |        |                 | $            |          |   |        | $       | 3,483  |        
|                                                     | Due to affiliate                                                  |                                          |                           |        |              |        |         | 6,184        |        |                 |              | (6,184   | ) |        |         |       |        
|                                                     | Accrued payroll and related benefits                              |                                          |                           | 1,113  |              |        |         | 6,242        |        |                 |              |          |   |        |         | 7,355  |        
|                                                     | Interest payable                                                  |                                          |                           | 3,809  |              |        |         |              |        |                 |              |          |   |        |         | 3,809  |        
|                                                     | Television and radio broadcast rights payable                     |                                          |                           |        |              |        |         | 5,524        |        |                 |              |          |   |        |         | 5,524  |        
|                                                     | Income taxes payable                                              |                                          |                           |        |              |        |         | 552          |        |                 |              | (552     | ) |        |         |       |        
|                                                     | Other current liabilities                                         |                                          |                           | 2,058  |              |        |         | 2,462        |        |                 |              |          |   |        |         | 4,520  |        
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         
|                                                     |                                                                   |                                          | Total current liabilities |        |              | 7,673  |         |              |        | 23,754          |              |          |   | (6,736 | )       |        |         | 24,691 | 
|Long-term debt                                       |                                                                   |                                          | 150,000                   |        |              |        |         |              |        |                 |              |          |   |        | 150,000 |       
|Accrued retirement benefits                          |                                                                   |                                          | 19,560                    |        |              |        | 84      |              |        |                 |              |          |   |        | 19,644  |       
|Deferred income taxes                                |                                                                   |                                          | 30,868                    |        |              |        | 513     |              |        |                 |              |          |   |        | 31,381  |       
|Other liabilities                                    |                                                                   |                                          | 65                        |        |              |        | 4,991   |              |        |                 |              |          |   |        | 5,056   |       
|Stockholders Equity                                 |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |          |   |        |         |       
|Common stock                                         |                                                                   |                                          | 10,881                    |        |              |        | 1,131   |              |        |                 | (1,131       | )        |   |        | 10,881  |       
|                                                     | Capital in excess of par                                          |                                          |                           | 8,590  |              |        |         | 164,234      |        |                 |              | (164,234 | ) |        |         | 8,590  |        
|                                                     | Deferred compensation                                             |                                          |                           | (159   | )            |        |         |              |        |                 |              |          |   |        |         | (159   | )      
|                                                     | Accumulated other comprehensive income  net of income
    taxes: |                                          |                           |        |              |        |         |              |        |                 |              |          |   |        |         |        |        
|                                                     |                                                                   | Unrealized gain on marketable securities |                           |        | 109,600      |        |         |              |        |                 |              |          |   |        |         |        | 109,600 |       
|                                                     |                                                                   | Minimum pension liability                |                           |        | (2,172       | )      |         |              |        |                 |              |          |   |        |         |        | (2,172  | )     
|                                                     | Retained earnings                                                 |                                          |                           | 82,881 |              |        |         | 59,692       |        |                 |              | (59,692  | ) |        |         | 82,881 |        
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         
|Total Stockholders Equity                           |                                                                   |                                          | 209,621                   |        |              |        | 225,057 |              |        |                 | (225,057     | )        |   |        | 209,621 |       
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         
|Total Liabilities and Stockholders Equity           |                                                                   | $                                        | 417,787                   |        |              | $      | 254,399 |              |        | $               | (231,793     | )        |   | $      | 440,393 |       
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         

78



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##### Table of Contents



FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Financial Information for Guarantors


Condensed Consolidated Balance Sheet


as of December 31, 2004


|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |          |       |         |         |        |         |        | 
|---------------------------------------------------- | ----------------------------------------------------------------- | ---------------------------------------- | ------------------------- | ------ | ------------ | ------ | ------- | ------------ | ------ | --------------- | ------------ | -------- | ----- | ------- | ------- | ------ | ------- | ------ | 
|                                                     |                                                                   |                                          |                           | Wholly |              |        |         |              | Fisher |                
|                                                     |                                                                   | Fisher                                   |                           |        | Owned        |        |         |              |        | Communications, |             
|                                                     |                                                                   | Communications,                          |                           |        | Guarantor    |        |         |              |        | Inc. and        |             
|                                                     |                                                                   | Inc.                                     |                           |        | Subsidiaries |        |         | Eliminations |        |                 | Subsidiaries |         
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         
|                                                     |                                                                   | (In thousands)                           |                          
|ASSETS                                              
|Current Assets                                       |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |          |       |         |         |       
|                                                     | Cash and cash equivalents                                         |                                          | $                         | 1,007  |              |        | $       | 15,018       |        |                 | $            |          |       |         | $       | 16,025 |        
|                                                     | Receivables, net                                                  |                                          |                           | 6      |              |        |         | 28,533       |        |                 |              |          |       |         |         | 28,539 |        
|                                                     | Due from affiliate                                                |                                          |                           | 10,379 |              |        |         |              |        |                 |              | (10,379  | )     |         |         |       |        
|                                                     | Income taxes receivable                                           |                                          |                           | 5,234  |              |        |         |              |        |                 |              | (1,879   | )     |         |         | 3,355  |        
|                                                     | Deferred income taxes                                             |                                          |                           | 92     |              |        |         | 539          |        |                 |              |          |       |         |         | 631    |        
|                                                     | Prepaid expenses                                                  |                                          |                           | 222    |              |        |         | 3,431        |        |                 |              |          |       |         |         | 3,653  |        
|                                                     | Television and radio broadcast rights                             |                                          |                           |        |              |        |         | 8,398        |        |                 |              |          |       |         |         | 8,398  |        
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         
|                                                     |                                                                   |                                          | Total current assets      |        |              | 16,940 |         |              |        | 55,919          |              |          |       | (12,258 | )       |        |         | 60,601 | 
|Marketable securities, at market value               |                                                                   |                                          | 156,925                   |        |              |        | 177     |              |        |                 |              |          |       |         | 157,102 |       
|Investment in consolidated subsidiaries              |                                                                   |                                          | 218,380                   |        |              |        |         |              |        |                 | (218,380     | )        |       |         |         |       
|Cash value of life insurance and retirement deposits |                                                                   |                                          | 5,454                     |        |              |        | 9,517   |              |        |                 |              |          |       |         | 14,971  |       
|Television and radio broadcast rights                |                                                                   |                                          |                           |        |              |        | 3,086   |              |        |                 |              |          |       |         | 3,086   |       
|Goodwill, net                                        |                                                                   |                                          |                           |        |              |        | 38,354  |              |        |                 |              |          |       |         | 38,354  |       
|Intangible assets                                    |                                                                   |                                          |                           |        |              |        | 1,244   |              |        |                 |              |          |       |         | 1,244   |       
|Investment in equity investee                        |                                                                   |                                          |                           |        |              |        | 2,825   |              |        |                 |              |          |       |         | 2,825   |       
|Deferred income taxes                                |                                                                   |                                          |                           |        |              |        | 6,125   |              |        |                 | (6,125       | )        |       |         |         |       
|Prepaid financing fees and other assets              |                                                                   |                                          | 5,995                     |        |              |        | 1,401   |              |        |                 |              |          |       |         | 7,396   |       
|Property, plant and equipment, net                   |                                                                   |                                          | 838                       |        |              |        | 149,455 |              |        |                 |              |          |       |         | 150,293 |       
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         
|Total Assets                                         |                                                                   | $                                        | 404,532                   |        |              | $      | 268,103 |              |        | $               | (236,763     | )        |       | $       | 435,872 |       
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         
|                                                    
|LIABILITIES AND STOCKHOLDERS EQUITY                
|Current Liabilities                                  |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |          |       |         |         |       
|                                                     | Notes payable                                                     |                                          | $                         | 44     |              |        | $       | 9            |        |                 | $            |          |       |         | $       | 53     |        
|                                                     | Trade accounts payable                                            |                                          |                           | 633    |              |        |         | 3,122        |        |                 |              |          |       |         |         | 3,755  |        
|                                                     | Due to affiliate                                                  |                                          |                           |        |              |        |         | 10,379       |        |                 |              | (10,379  | )     |         |         |       |        
|                                                     | Accrued payroll and related benefits                              |                                          |                           | 1,068  |              |        |         | 6,263        |        |                 |              |          |       |         |         | 7,331  |        
|                                                     | Interest payable                                                  |                                          |                           | 3,630  |              |        |         |              |        |                 |              |          |       |         |         | 3,630  |        
|                                                     | Television and radio broadcast rights payable                     |                                          |                           |        |              |        |         | 7,419        |        |                 |              |          |       |         |         | 7,419  |        
|                                                     | Income taxes payable                                              |                                          |                           |        |              |        |         | 1,879        |        |                 |              | (1,879   | )     |         |         |       |        
|                                                     | Other current liabilities                                         |                                          |                           | 2,964  |              |        |         | 2,268        |        |                 |              |          |       |         |         | 5,232  |        
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         
|                                                     |                                                                   |                                          | Total current liabilities |        |              | 8,339  |         |              |        | 31,339          |              |          |       | (12,258 | )       |        |         | 27,420 | 
|Long-term debt                                       |                                                                   |                                          | 150,000                   |        |              |        |         |              |        |                 |              |          |       |         | 150,000 |       
|Accrued retirement benefits                          |                                                                   |                                          | 1,482                     |        |              |        | 17,485  |              |        |                 |              |          |       |         | 18,967  |       
|Deferred income taxes                                |                                                                   |                                          | 42,258                    |        |              |        |         |              |        |                 | (6,125       | )        |       |         | 36,133  |       
|Other liabilities                                    |                                                                   |                                          |                           |        |              |        | 899     |              |        |                 |              |          |       |         | 899     |       
|Stockholders Equity Common stock                    |                                                                   |                                          | 10,773                    |        |              |        | 1,131   |              |        |                 | (1,131       | )        |       |         | 10,773  |       
|                                                     | Capital in excess of par                                          |                                          |                           | 4,535  |              |        |         | 164,234      |        |                 |              | (164,234 | )     |         |         | 4,535  |        
|                                                     | Deferred compensation                                             |                                          |                           |        |              |        |         |              |        |                 |              |          |       |         |         |        |        
|                                                     | Accumulated other comprehensive income  net of income
    taxes: |                                          |                           |        |              |        |         |              |        |                 |              |          |       |         |         |        |        
|                                                     |                                                                   | Unrealized gain on marketable securities |                           |        | 101,400      |        |         |              | 75     |                 |              |          | (75   | )       |         |        | 101,400 |       
|                                                     |                                                                   | Minimum pension liability                |                           |        | (2,208       | )      |         |              | (2,208 | )               |              |          | 2,208 |         |         |        | (2,208  | )     
|                                                     | Retained earnings                                                 |                                          |                           | 87,953 |              |        |         | 55,148       |        |                 |              | (55,148  | )     |         |         | 87,953 |        
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         
|Total Stockholders Equity                           |                                                                   |                                          | 202,453                   |        |              |        | 218,380 |              |        |                 | (218,380     | )        |       |         | 202,453 |       
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         
|Total Liabilities and Stockholders Equity           |                                                                   | $                                        | 404,532                   |        |              | $      | 268,103 |              |        | $               | (236,763     | )        |       | $       | 435,872 |       
|                                                     |                                                                   |                                          |                           |        |              |        |         |              |        |                 |              |         

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Financial Information for Guarantors


Condensed Consolidated Statement of Cash Flows


for the Year Ended December 31, 2005


|                                                    |                                                     |                 |       |        |              |   |        |              |        |                 |              |  |  |   |        |        |  
|--------------------------------------------------- | --------------------------------------------------- | --------------- | ----- | ------ | ------------ | - | ------ | ------------ | ------ | --------------- | ------------ |  |  | - | ------ | ------ | -
|                                                    |                                                     |                 |       | Wholly |              |   |        |              | Fisher |                
|                                                    |                                                     | Fisher          |       |        | Owned        |   |        |              |        | Communications, |             
|                                                    |                                                     | Communications, |       |        | Guarantor    |   |        |              |        | Inc. and        |             
|                                                    |                                                     | Inc.            |       |        | Subsidiaries |   |        | Eliminations |        |                 | Subsidiaries | 
|                                                    |                                                     |                 |       |        |              |   |        |              |        |                 |              | 
|                                                    |                                                     | (In thousands)  |      
|Net cash (used in) provided by operating activities |                                                     | $               | (417  | )      |              | $ | 5,990  |              |        | $               |              |  |  | $ | 5,573  |       
|Cash flows from investing activities                |                                                     |                 |       |        |              |   |        |              |        |                 |              |  |  |   |        |       
|                                                    | Proceeds from collection of notes receivable        |                 |       |        |              |   |        | 1,585        |        |                 |              |  |  |   |        | 1,585  |  
|                                                    | Proceeds from sale of marketable securities         |                 |       | 73     |              |   |        | 174          |        |                 |              |  |  |   |        | 247    |  
|                                                    | Proceeds from sale of property, plant and equipment |                 |       |        |              |   |        | 418          |        |                 |              |  |  |   |        | 418    |  
|                                                    | Purchase of property, plant and equipment           |                 |       | (309   | )            |   |        | (7,214       | )      |                 |              |  |  |   |        | (7,523 | )
|                                                    |                                                     |                 |       |        |              |   |        |              |        |                 |              | 
|Net cash used in investing activities               |                                                     |                 | (236  | )      |              |   | (5,037 | )            |        |                 |              |  |  |   | (5,273 | )     
|                                                    |                                                     |                 |       |        |              |   |        |              |        |                 |              | 
|Cash flows from financing activities                |                                                     |                 |       |        |              |   |        |              |        |                 |              |  |  |   |        |       
|                                                    | Net payments under notes payable                    |                 |       | (44    | )            |   |        | (9           | )      |                 |              |  |  |   |        | (53    | )
|                                                    | Payment of deferred loan costs                      |                 |       | (87    | )            |   |        |              |        |                 |              |  |  |   |        | (87    | )
|                                                    | Proceeds from exercise of stock options             |                 |       | 3,437  |              |   |        |              |        |                 |              |  |  |   |        | 3,437  |  
|                                                    |                                                     |                 |       |        |              |   |        |              |        |                 |              | 
|Net cash provided by (used in) financing activities |                                                     |                 | 3,306 |        |              |   | (9     | )            |        |                 |              |  |  |   | 3,297  |       
|                                                    |                                                     |                 |       |        |              |   |        |              |        |                 |              | 
|Net increase in cash and cash equivalents           |                                                     |                 | 2,653 |        |              |   | 944    |              |        |                 |              |  |  |   | 3,597  |       
|Cash and cash equivalents, beginning of period      |                                                     |                 | 1,007 |        |              |   | 15,018 |              |        |                 |              |  |  |   | 16,025 |       
|                                                    |                                                     |                 |       |        |              |   |        |              |        |                 |              | 
|Cash and cash equivalents, end of period            |                                                     | $               | 3,660 |        |              | $ | 15,962 |              |        | $               |              |  |  | $ | 19,622 |       
|                                                    |                                                     |                 |       |        |              |   |        |              |        |                 |              | 

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Financial Information for Guarantors


Condensed Consolidated Statement of Cash Flows


for the Year Ended December 31, 2004


|                                                    |                                                                                                           |                 |         |          |              |   |        |              |        |                 |              |       |  |   |        |          |  
|--------------------------------------------------- | --------------------------------------------------------------------------------------------------------- | --------------- | ------- | -------- | ------------ | - | ------ | ------------ | ------ | --------------- | ------------ | ----- |  | - | ------ | -------- | -
|                                                    |                                                                                                           |                 |         | Wholly   |              |   |        |              | Fisher |                
|                                                    |                                                                                                           | Fisher          |         |          | Owned        |   |        |              |        | Communications, |             
|                                                    |                                                                                                           | Communications, |         |          | Guarantor    |   |        |              |        | Inc. and        |             
|                                                    |                                                                                                           | Inc.            |         |          | Subsidiaries |   |        | Eliminations |        |                 | Subsidiaries |      
|                                                    |                                                                                                           |                 |         |          |              |   |        |              |        |                 |              |      
|                                                    |                                                                                                           | (In thousands)  |        
|Net cash (used in) provided by operating activities |                                                                                                           | $               | 12,591  |          |              | $ | 13,999 |              |        | $               | (7,500       | )     |  | $ | 19,090 |         
|Cash flows from investing activities                |                                                                                                           |                 |         |          |              |   |        |              |        |                 |              |       |  |   |        |         
|                                                    | Proceeds from collection of notes receivable                                                              |                 |         |          |              |   |        | 428          |        |                 |              |       |  |   |        | 428      |  
|                                                    | Proceeds from sale of property, plant and equipment                                                       |                 |         |          |              |   |        | 112          |        |                 |              |       |  |   |        | 112      |  
|                                                    | Purchase of radio station license                                                                         |                 |         |          |              |   |        | (204         | )      |                 |              |       |  |   |        | (204     | )
|                                                    | Purchase of property, plant and equipment                                                                 |                 |         | (784     | )            |   |        | (6,007       | )      |                 |              |       |  |   |        | (6,791   | )
|                                                    |                                                                                                           |                 |         |          |              |   |        |              |        |                 |              |      
|Net cash used in investing activities               |                                                                                                           |                 | (784    | )        |              |   | (5,671 | )            |        |                 |              |       |  |   | (6,455 | )       
|                                                    |                                                                                                           |                 |         |          |              |   |        |              |        |                 |              |      
|Cash flows from financing activities                |                                                                                                           |                 |         |          |              |   |        |              |        |                 |              |       |  |   |        |         
|                                                    | Net payments under notes payable                                                                          |                 |         | (662     | )            |   |        |              |        |                 |              |       |  |   |        | (662     | )
|                                                    | Borrowings under borrowing agreements                                                                     |                 |         | 158,000  |              |   |        | 3,000        |        |                 |              |       |  |   |        | 161,000  |  
|                                                    | Payments on borrowing agreements                                                                          |                 |         | (142,709 | )            |   |        |              |        |                 |              |       |  |   |        | (142,709 | )
|                                                    | Payment to terminate forward transaction tranche and
    additional amount to retire outstanding balances |                 |         | (21,589  | )            |   |        |              |        |                 |              |       |  |   |        | (21,589  | )
|                                                    | Payment of deferred loan costs                                                                            |                 |         | (5,907   | )            |   |        | (167         | )      |                 |              |       |  |   |        | (6,074   | )
|                                                    | Dividends Paid                                                                                            |                 |         |          |              |   |        | (7,500       | )      |                 |              | 7,500 |  |   |        |         |  
|                                                    | Proceeds from exercise of stock options                                                                   |                 |         | 428      |              |   |        |              |        |                 |              |       |  |   |        | 428      |  
|                                                    |                                                                                                           |                 |         |          |              |   |        |              |        |                 |              |      
|Net cash provided by (used in) financing activities |                                                                                                           |                 | (12,439 | )        |              |   | (4,667 | )            |        |                 | 7,500        |       |  |   | (9,606 | )       
|                                                    |                                                                                                           |                 |         |          |              |   |        |              |        |                 |              |      
|Net increase in cash and cash equivalents           |                                                                                                           |                 | (632    | )        |              |   | 3,661  |              |        |                 |              |       |  |   | 3,029  |         
|Cash and cash equivalents, beginning of period      |                                                                                                           |                 | 1,639   |          |              |   | 11,357 |              |        |                 |              |       |  |   | 12,996 |         
|                                                    |                                                                                                           |                 |         |          |              |   |        |              |        |                 |              |      
|Cash and cash equivalents, end of period            |                                                                                                           | $               | 1,007   |          |              | $ | 15,018 |              |        | $               |              |       |  | $ | 16,025 |         
|                                                    |                                                                                                           |                 |         |          |              |   |        |              |        |                 |              |      

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##### Table of Contents



FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Financial Information for Guarantors


Condensed Consolidated Statement of Cash Flows


for the Year Ended December 31, 2003


|                                                     |                                                                         |                 |         |         |              |   |          |              |        |                 |              |  |  |   |          |          |  
|---------------------------------------------------- | ----------------------------------------------------------------------- | --------------- | ------- | ------- | ------------ | - | -------- | ------------ | ------ | --------------- | ------------ |  |  | - | -------- | -------- | -
|                                                     |                                                                         |                 |         | Wholly  |              |   |          |              | Fisher |                
|                                                     |                                                                         | Fisher          |         |         | Owned        |   |          |              |        | Communications, |             
|                                                     |                                                                         | Communications, |         |         | Guarantor    |   |          |              |        | Inc. and        |             
|                                                     |                                                                         | Inc.            |         |         | Subsidiaries |   |          | Eliminations |        |                 | Subsidiaries | 
|                                                     |                                                                         |                 |         |         |              |   |          |              |        |                 |              | 
|                                                     |                                                                         | (In thousands)  |        
|Net cash (used in) provided by operating activities  |                                                                         | $               | (750    | )       |              | $ | 7,034    |              |        | $               |              |  |  | $ | 6,284    |         
|Cash flows from investing activities                 |                                                                         |                 |         |         |              |   |          |              |        |                 |              |  |  |   |          |         
|                                                     | Proceeds from collection of notes receivable                            |                 |         |         |              |   |          | 3,235        |        |                 |              |  |  |   |          | 3,235    |  
|                                                     | Proceeds from sale of marketable securities                             |                 |         | 5,169   |              |   |          |              |        |                 |              |  |  |   |          | 5,169    |  
|                                                     | Proceeds from sale of Georgia television                                |                 |         |         |              |   |          | 40,725       |        |                 |              |  |  |   |          | 40,725   |  
|                                                     | Proceeds from sale of Portland radio stations                           |                 |         |         |              |   |          | 42,033       |        |                 |              |  |  |   |          | 42,033   |  
|                                                     | Proceeds from sale of real estate and property, plant and
    equipment |                 |         |         |              |   |          | 61,050       |        |                 |              |  |  |   |          | 61,050   |  
|                                                     | Release of restricted cash                                              |                 |         |         |              |   |          | 12,778       |        |                 |              |  |  |   |          | 12,778   |  
|                                                     | Purchase of radio station license                                       |                 |         |         |              |   |          | (468         | )      |                 |              |  |  |   |          | (468     | )
|                                                     | Purchase of property, plant and equipment                               |                 |         | (27     | )            |   |          | (12,386      | )      |                 |              |  |  |   |          | (12,413  | )
|                                                     |                                                                         |                 |         |         |              |   |          |              |        |                 |              | 
|Net cash provided by investing activities            |                                                                         |                 | 5,142   |         |              |   | 146,967  |              |        |                 |              |  |  |   | 152,109  |         
|                                                     |                                                                         |                 |         |         |              |   |          |              |        |                 |              | 
|Cash flows from financing activities                 |                                                                         |                 |         |         |              |   |          |              |        |                 |              |  |  |   |          |         
|                                                     | Net payments under notes payable                                        |                 |         | (122    | )            |   |          |              |        |                 |              |  |  |   |          | (122     | )
|                                                     | Payments on borrowing agreements and mortgage loans                     |                 |         | (18,669 | )            |   |          | (149,998     | )      |                 |              |  |  |   |          | (168,667 | )
|                                                     | Payment of deferred loan costs                                          |                 |         |         |              |   |          | (613         | )      |                 |              |  |  |   |          | (613     | )
|                                                     | Proceeds from exercise of stock options                                 |                 |         | 490     |              |   |          |              |        |                 |              |  |  |   |          | 490      |  
|                                                     |                                                                         |                 |         |         |              |   |          |              |        |                 |              | 
|Net cash used in financing activities                |                                                                         |                 | (18,301 | )       |              |   | (150,611 | )            |        |                 |              |  |  |   | (168,912 | )       
|                                                     |                                                                         |                 |         |         |              |   |          |              |        |                 |              | 
|Net (decrease) increase in cash and cash equivalents |                                                                         |                 | (13,909 | )       |              |   | 3,390    |              |        |                 |              |  |  |   | (10,519  | )       
|Cash and cash equivalents, beginning of period       |                                                                         |                 | 15,548  |         |              |   | 7,967    |              |        |                 |              |  |  |   | 23,515   |         
|                                                     |                                                                         |                 |         |         |              |   |          |              |        |                 |              | 
|Cash and cash equivalents, end of period             |                                                                         | $               | 1,639   |         |              | $ | 11,357   |              |        | $               |              |  |  | $ | 12,996   |         
|                                                     |                                                                         |                 |         |         |              |   |          |              |        |                 |              | 

82



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##### Table of Contents






Schedule II


FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES


Valuation and Qualifying Accounts


|                                |                                         |                |   |      |      |  |   |      |   |  |   |        |  
|------------------------------- | --------------------------------------- | -------------- | - | ---- | ---- |  | - | ---- | - |  | - | ------ | -
|Year Ended December 31          |                                         | 2005           |   |      | 2004 |  |   | 2003 |  
|                                |                                         |                |   |      |      |  |   |      |  
|                                |                                         | (In thousands) |  
|Allowance for doubtful accounts |                                         |                |   |      |      |  |   |      |   |  |   |       
|                                | Balance at beginning of year            |                | $ | 651  |      |  | $ | 930  |   |  | $ | 1,274  |  
|                                | Additions charged to expense            |                |   | 492  |      |  |   | 318  |   |  |   | 728    |  
|                                | Balances written off, net of recoveries |                |   | (640 | )    |  |   | (597 | ) |  |   | (1,072 | )
|                                |                                         |                |   |      |      |  |   |      |  
|                                | Balance at end of year                  |                | $ | 503  |      |  | $ | 651  |   |  | $ | 930    |  
|                                |                                         |                |   |      |      |  |   |      |  



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##### Table of Contents






SIGNATURES






| |                            
| | ---------------------------
| | Fisher Communications, Inc.
| |                            
| | (Registrant)               



| |     |                     
| | --- | --------------------
| | By: | /s/ Colleen B. Brown

| | 
| | 
| | 



| |                                      
| | -------------------------------------
| | Colleen B. Brown                     
| | President and Chief Executive Officer



|                                                       |  |                                                                                      |  |                |  | 
|------------------------------------------------------ |  | ------------------------------------------------------------------------------------ |  | -------------- |  | 
|Signatures                                             |  | Title                                                                                |  | Date          
|                                                       |  |                                                                                      |  |               
|Principal Executive Officer:                           |  |                                                                                      |  |               
|                                                      
|/s/ Colleen B. BrownColleen B. Brown                   |  | President and Chief Executive Officer                                                |  | March 14, 2006
|Chief Financial and Accounting Officer:                |  |                                                                                      |  |               
|                                                      
|/s/ Robert C. BatemanRobert C. Bateman                 |  | Senior Vice President and Chief Financial Officer (Principal
    Accounting Officer) |  | March 14, 2006
|A Majority of the Board of Directors:                  |  |                                                                                      |  |               
|                                                      
|/s/ Deborah L. BevierDeborah L. Bevier                 |  | Director                                                                             |  | March 14, 2006
|                                                      
|/s/ James W. CannonJames W. Cannon                     |  | Director                                                                             |  | March 14, 2006
|                                                      
|/s/ Phelps K. FisherPhelps K. Fisher                   |  | Director                                                                             |  | March 14, 2006
|                                                      
|Carol H. Fratt                                         |  | Director                                                                             |  |               
|                                                      
|/s/ Donald G.
    Graham, Jr.Donald G.
    Graham, Jr. |  | Director                                                                             |  | March 14, 2006
|                                                      
|/s/ Donald G.
    Graham, IIIDonald G. Graham, III     |  | Director                                                                             |  | March 14, 2006
|                                                      
|/s/ Richard L. HawleyRichard L. Hawley                 |  | Director                                                                             |  | March 14, 2006



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##### Table of Contents



|                                                         |  |          |  |                |  | 
|-------------------------------------------------------- |  | -------- |  | -------------- |  | 
|Signatures                                               |  | Title    |  | Date          
|                                                         |  |          |  |               
|                                                        
|/s/ Jerry A. St. DennisJerry A. St. Dennis               |  | Director |  | March 14, 2006
|                                                        
|/s/ George F.
    Warren, Jr.George F.
    Warren, Jr.   |  | Director |  | March 14, 2006
|                                                        
|/s/ William W.
    Warren, Jr.William W.
    Warren, Jr. |  | Director |  | March 14, 2006



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##### Table of Contents






EXHIBIT INDEX


|            |    |             |  |                                                                                                                                                                                                                                                                                                                                         
|----------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |    | Description
|            |    |            
|            | 2  | .1          |  | Asset Purchase Agreement between Fisher Radio Regional Group,
    Inc. and Equity Broadcasting Corporation, dated December 7,
    2005.                                                                                                                                                                                                 
|            | 3  | .1*         |  | Articles of Incorporation (filed as Exhibit 3.1 of the
    Companys Registration Statement on Form 10 (File
    No. 000-22439)).                                                                                                                                                                                                       
|           
|            | 3  | .2*         |  | Articles of Amendment to the Amended and Restated Articles of
    Incorporation filed December 10, 1997 (filed as
    Exhibit 3.2 of the Companys Annual Report on
    Form 10-K for the fiscal year ended December 31, 1997
    (File No. 000-22439)).                                                                                
|           
|            | 3  | .3*         |  | Articles of Amendment to the Amended and Restated Articles of
    Incorporation filed March 8, 2001 (filed as
    Exhibit 3.3 of the Companys Annual Report on
    Form 10-K for the fiscal year ended December 31, 2001
    (File No. 000-22439)).                                                                                    
|           
|            | 3  | .4*         |  | Bylaws amended as of July 28, 2005 (filed as
    Exhibit 3.1 of the Companys Current Report on
    Form 8-K dated August 2, 2005 (File
    No. 000-22439)).                                                                                                                                                                            
|           
|            | 4  | .1*         |  | Indenture relating to Fisher Communications, Inc.s
    8.625% Senior Notes Due 2014, dated as of
    September 20, 2004 (filed as Exhibit 4.1 to the
    Current Report on Form 8-K dated September 20, 2004).                                                                                                                         
|           
|            | 4  | .2*         |  | Registration Rights Agreement among Fisher Communications, Inc.,
    its domestic subsidiaries listed on Schedule 1 thereto and
    Wachovia Securities, Inc., dated September 20, 2004 (filed
    as Exhibit 4.2 to the Current Report on Form 8-K dated
    September 20, 2004).                                                      
|           
|            | 4  | .3*         |  | Form of Fisher Communications, Inc.s 8.625% Exchange Note
    due 2014 (filed as Exhibit 4.3 to the Registration
    Statement on Form S-4 filed on December 20, 2004).                                                                                                                                                                
|           
|            | 10 | .1+         |  | Amended and Restated Fisher Communications, Inc. Supplemental
    Pension Plan, dated December 31, 2005.                                                                                                                                                                                                                                
|           
|            | 10 | .2*         |  | Form of Affiliation Agreement between CBS Television Network and
    Retlaw Enterprises, Inc. regarding KJEO-TV, KJEO-TV, KIMA-TV,
    KBCI-TV, KIDK-TV, KVAL-TV, KCBY-TV and KPIC-TV (filed as
    Exhibit 10.17 to the Companys Annual Report on
    Form 10-K for the fiscal year ended December 31, 1999
    (File No. 000-22439)).
|           
|            | 10 | .3*+        |  | Amended and Restated Fisher Communications Incentive Plan of
    1995. (Filed as Exhibit 10.22 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 2000 (File No. 000-22439)).                                                                                                                   
|           
|            | 10 | .4*+        |  | Fisher Communications Incentive Plan of 2001. (Filed as
    Exhibit 10.23 to the Companys Annual Report on
    Form 10-K for the fiscal year ended December 31, 2000
    (File No. 000-22439)).                                                                                                                                        
|           
|            | 10 | .5*+        |  | Retirement Agreement with David Hillard, dated April 16,
    2004 (filed as Exhibit 10.1 to the Companys Quarterly
    Report on Form 10-Q filed on August 9, 2004).                                                                                                                                                                   
|           
|            | 10 | .6*+        |  | Compensation Committee Letter to David D. Hillard dated
    May 3, 2004 (filed as Exhibit 10.2 to the
    Companys Quarterly Report on Form 10-Q filed on
    August 9, 2004).                                                                                                                                                         
|           
|            | 10 | .7*+        |  | Employment Separation Agreement with William W.
    Krippaehne, Jr., dated March 8, 2005 (filed as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K dated March 14, 2005).                                                                                                                                              
|           
|            | 10 | .8*         |  | Credit Agreement, dated September 20, 2004, among Fisher
    Communications, Inc., certain subsidiary guarantors, the lenders
    thereto and Wachovia Bank, National Association, as
    administrative agent (filed as Exhibit 10.1 to the Current
    Report on Form 8-K filed on September 21, 2004 (File
    No. 000-22439).       
|           
|            | 10 | .9*         |  | Termination Agreement, dated October 21, 2004, between
    Merrill Lynch International and Fisher Communications, Inc.
    (filed as Exhibit 10.1 to the Current Report on
    Form 8-K filed on November 5, 2004 (File
    No. 000-22439).                                                                                             
|           
|            | 10 | .10*+       |  | Form of Non-Qualified Stock Option Contract (filed as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K dated October 13, 2005 (File
    No. 000-22439)).                                                                                                                                                                
|           
|            | 10 | .11*+       |  | Form of Restricted Stock Rights Agreement (filed as
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K dated October 13, 2005 (File
    No. 000-22439)).                                                                                                                                                                  
|           
|            | 10 | .12*       |  | Renewal Letter Agreements dated May 6, 2005 between
    American Broadcasting Companies, Inc. (ABC) and
    Fisher Broadcasting Company, Inc. (filed as Exhibit 10.3 to
    the Companys Quarterly Report on Form 10-Q filed on
    August 8, 2005 (File No. 000-22439)).                                                            



---



##### Table of Contents



|            |    |             |  |                                                                                                                                                                                                                     
|----------- | -- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |    | Description
|            |    |            
|           
|            | 10 | .13        |  | Renewal Letter Agreement dated January 6, 2006 between CBS
    Television and Fisher Broadcasting  Oregon TV LLC.                                                                                                  
|           
|            | 10 | .14        |  | Renewal Letter Agreement dated January 6, 2006 between CBS
    Television and Fisher Broadcasting  Washington TV LLC.                                                                                              
|           
|            | 10 | .15        |  | Renewal Letter Agreement dated January 6, 2006 between CBS
    Television and Fisher Broadcasting  Idaho TV LLC.                                                                                                   
|           
|            | 10 | .16        |  | Renewal Letter Agreement dated January 6, 2006 between CBS
    Television and Fisher Broadcasting  S.E. Idaho TV LLC.                                                                                              
|           
|            | 10 | .17*+       |  | Employment Separation Agreement with Laura Boyd, dated
    December 2, 2005 (filed as Exhibit 10.1 to the
    Companys Current Report on Form 8-K dated
    January 17, 2006 (File No. 000-22439)).                
|           
|            | 10 | .18*+       |  | Employment Separation Agreement with Sharon J. Johnston, dated
    December 20, 2005 (filed as Exhibit 10.1 to the
    Companys Current Report on Form 8-K dated
    January 6, 2006 (File No. 000-22439)).        
|           
|            | 10 | .19*+       |  | Change in Control Severance Agreement with Colleen B. Brown,
    dated October 10, 2005 (filed as Exhibit 10.1 to the
    Companys Current Report on Form 8-K dated
    October 7, 2005 (File No. 000-22439)).     
|           
|            | 10 | .20*+       |  | Offer Letter to Colleen B. Brown, dated October 3, 2005
    (filed as Exhibit 10.2 to the Companys Current Report
    on Form 8-K dated October 7, 2005 (File
    No. 000-22439)).                                 
|           
|            | 10 | .21*+       |  | Employment Separation Agreement with Benjamin W. Tucker, dated
    October 3, 2005 (filed as Exhibit 10.3 to the
    Companys Current Report on Form 8-K dated
    October 7, 2005 (File No. 000-22439)).          
|           
|            | 10 | .22*+       |  | Employment Separation Agreement with Kirk G. Anderson, dated
    July 1, 2005 (filed as Exhibit 10.1 to the
    Companys Current Report on Form 8-K dated
    August 15, 2005 (File No. 000-22439)).               
|           
|            | 10 | .23*+       |  | Letter Agreement with Robert C. Bateman, date June 16, 2005
    (filed as Exhibit 10.1 to the Companys Current Report
    on Form 8-K dated June 20, 2005 (File
    No. 000-22439)).                               
|           
|            | 10 | .24*        |  | Restricted Stock Rights Grant Agreement with Robert C. Bateman,
    dated June 14, 2005 (filed as Exhibit 10.2 to the
    Companys Quarterly Report on Form 10-Q filed on
    August 8, 2005 (File No. 000-22439)).
|           
|            | 21 | .1          |  | Subsidiaries of the Registrant.                                                                                                                                                                                     
|           
|            | 23 | .1          |  | Consent of PricewaterhouseCoopers LLP.                                                                                                                                                                              
|           
|            | 31 | .1          |  | Certification of Chief Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                             
|           
|            | 31 | .2          |  | Certification of Chief Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                             
|           
|            | 32 | .1          |  | Certification of CEO pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.                                                                              
|            | 32 | .2          |  | Certification of CFO pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.                                                                              






| |   |                           
| | - | --------------------------
| | * | Incorporated by reference.





| |   |                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Certain information in this exhibit has been omitted and filed
    separately with the Commission pursuant to a confidential
    treatment request under 17 C.F.R.
    Sections 200.80(b)(4), 200.83 and 230.406.